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Dubai: The UAE had 59,000 millionaires in 2005, up 11.8 per cent from 2004, while the Middle East had 300,000 with combined wealth of $1.2 trillion, data from the World Wealth Report showed yesterday. Saudi Arabia has 80,100 millionaires or high net worth individuals (HNWIs), people with financial assets of at least $1 million without considering their primary homes, the annual report produced by investment bank Merrill Lynch and consulting firm Capgemini, said. "Accounting for nearly two thirds of the world's oil reserves, the Middle East and Africa continued to benefit from the global dependence on fossil fuels. As a result, financial wealth of high net worth individuals grew 19.7 per cent in 2005," the companies said in a statement.
Wealth creation in the UAE was driven by annual GDP growth of 6.7 per cent and the overall positive impact of the oil industry, which contributed a third of the country's economic output, the report said. High net worth investors in the Middle East showed a strong appetite for risk in 2005 resulting in much higher investments in equities and real estate. The sharp rise in property and equity prices the UAE's market capitalisation jumped 109 per cent in 2005 also created a wealth effect that has added to the pace of spending growth. The Middle East, however, contributed just 0.3 per cent of the world's millionaires, estimated at 8.7 million, who held a combined wealth of $33.3 trillion. The total number of ultra-high net worth individuals with more than $30 million in assets now stands at 85,400, up 10.2 per cent over 2004. But the pace of growth of wealth of the millionaires in the Middle East, at 19.7 per cent was the fastest in the world. "One area where high net worth individuals found significant opportunity was in the Asia Pacific region, where the twin drivers of market capitalisation and GDP continued to deliver high rates of growth in 2005," Mones Bazzy, Middle East director of Merrill Lynch's global private client group, told a news conference. "Latin America and the Middle East also exhibited strong growth." The high net worth population grew most dramatically in South Korea, rising 21.3 per cent; India, rising 19.3 per cent; Russia, where it rose 17.4 per cent, and South Africa, where it grew by 15.9 per cent. In addition, Brazil, Russia and India, three of the four BRIC nations, are among the top 10 fastest growing high net worth populations. These people increased investments in equities and alternative vehicles like private equity, while hedge funds, which have seen declines in returns in the last two years, lost favour. High net worth individuals, however, continue to shift investments away from North America while the Asia Pacific region surpassed Europe to become the second most popular region for international investment.
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