Dubai leads with ultra-rich individuals seeing their wealth benefit from boosts in various sectors such as real estate
The UAE experienced the fastest growth in terms of both millionaire population and wealth in the world this year, according to a new report.
As per the Wealth-X and UBS World Ultra Wealth Report 2014, this growth was fuelled in large part by the stellar performance of the country’s equity markets, with an increase of more than 70 per cent in the ADX General Equity index.
The report maintains that, although much of the country’s staggering economic progress in the last decades was based on oil, millionaire and ultra-rich individuals in the country have looked beyond just natural resources as a source of wealth.
According to the report, there are a total of 1,275 multi-millionaires in the UAE, up from 1,050 last year. These individuals now hold a collective $255 billion in net wealth among them, up from $190 billion last year.
The UAE is ranked No. 22 in the world according to the number of multi-millionaires that live here, ahead of global heavyweights such as Russia, Argentina and Sweden.
The US continues to hold the most number of multi-millionaires (69,560), with Germany a distant No. 2 with 19,095 multi-millionaires and then Japan (14,720), UK (11,510) and China (11,070) completing the Top 5.
India is ranked at No. 6 with 8,595 multi-millionaires in the emerging market, followed by Switzerland (6,635), Canada (5,305), France (4,750) and Brazil (4,225).
Regionally, Saudi Arabia with 1,495 multi-millionaires leads the rankings, followed by the UAE (1,275), Kuwait (835), Qatar (375), Iraq (185), and Oman (180).
More than a fifth of the ultra-rich population in the UAE are engaged in industrial conglomerates, it notes, combining business interests across sectors, from oil to real estate and retail.
This preference for such diversified business interests is particularly relevant in Dubai, which the report highlights has fewer oil resources than Abu Dhabi, but the preference for diversification is spreading, with Dubai leading the way.
Dubai has long been actively seeking and attracting foreign investment, and such an influx of foreign funds has helped the economy grow and many ultra-rich individuals have seen their wealth benefit from boosts in various sectors – such as real estate.
More than half of the UAE’s wealth is concentrated in the hands of the country’s ultra-rich population. In other words, although there is no doubt the country has risen rapidly in the last half century, its economic growth has been led by the ultra-rich population.
Only 8 per cent of the ultra-rich individuals in the UAE that have fully inherited their wealth, though a much larger than average proportion of ultra-rich individuals have at least partially inherited their wealth and further grown it.
“In the coming years, we expect that the ultra-rich population and wealth growth in the region will slow as more of the wider population starts capitalising on the opportunities available in this increasingly diverse and international country,” the report states.
This year’s report shows that the global ultra-rich population reached an all-time high of 211,275 individuals in 2014, representing a 6 per cent increase from 2013. The combined net worth of the world’s ultra-ruch individuals stands at $29.7 trillion, nearly $2 trillion more than last year.
These individuals’ influence continues to increase across the globe and across industries: from wealth management to luxury, philanthropy and other domains, the report states. Ultra wealthy individuals typically hold a significant proportion of their wealth in cash or cash equivalents. Almost a quarter of all ultra-rich wealth is held in such assets, enabling the wealthy individuals to wield tremendous power and influence in the global economy, it notes.
© Emirates 24|7 2014