Bahrain has top proportion of millionaire households in the GCC


Wealth creation in the UAE grew 10.2% last year
Gulf News
Dubai: In terms of density of millionaire household Bahrain tops the GCC region with 13 per cent of the households having private wealth in excess of $1 million (Dh3.67 million), according to Boston Consulting Group’s (BCG) annual wealth report Global Wealth 2016: Navigating the New Client Landscape.
Private financial wealth includes cash and deposits, mutual funds, listed and unlisted equities, debt securities, life insurance payments, and pension entitlements, all either held directly or indirectly through managed investments, and held either onshore or offshore. It excludes investors’ residences and luxury goods.
In millionaire household density, Qatar is close behind Bahrain accounting for 12.7 per cent of total households in the category. While Kuwait has 7.1 per cent of its households in the millionaire club, Oman and Saudi Arabia have 6.8 per cent and 4.6 per cent of their households respectively with private wealth in excess of $1 million.
Globally Liechtenstein leads in millionaire household density accounting for 18.9 per cent of total number of households closely followed by Switzerland with 15 per cent. In global millionaire household density ranking Bahrain comes third, followed by Qatar at fourth position.
The relatively high density of millionaire households in the GCC is attributed to the large number of family owned conglomerates and their hold on private wealth in the region.
“A significant share of economic activity in the GCC region is controlled by family owned conglomerates that are directly benefiting from the economic prosperity of the region and adding to the numbers of wealthy households. Some of the global offshore centres too have higher density of millionaires because they attract a significant share of global wealth,” said Markus Massi, Partner & Managing Director of BCG Middle East’s Financial Services practice.
Despite the persistent low oil prices over the past two years, Massi expects to see strong growth in Middle East household wealth over the next five years.
“Statistically high net worth households from the region have done well during periods of economic stress, particularly those in the top end of the spectrum because of their high level of exposure to global asset classes such as private equity, emerging market assets and other alternate asset classes compared to the traditional asset mix of global equities and fixed income,” said Massi.
In 2015, the UAE’s private wealth grew 10.2 per cent and is projected to grow at a compounded annual growth rate of 14.1 per cent between now and 2020. In Kuwait and Saudi Arabia, wealth creation contracted by 1.4 per cent and 4.8 per cent, respectively last year.