High net worth individuals see their ranks decline



The waiting list for those Porsche Panameras and Bentley Continentals may be getting shorter. The number of high net worth individuals in the Emirates declined last year by 18.8 per cent to 54,500 as the economic downturn took its toll on the bank accounts of wealthy residents, according to the latest World Wealth Report from Merrill Lynch and Capgemini.

High net worth individuals are defined as those with more than US$1 million (Dh3.6m) of investable assets apart from their primary residence, consumable goods, collectibles and durable products such as furniture and clothes. The wider Middle East region saw the number of high net worth individuals increase by 7.1 per cent, from 2008, and their total wealth increase by 5.1 per cent, which was one of the more modest gains in the world.

The report cited the "Dubai crisis" as a major source of the UAE losses in addition to a contraction in the economy, declining house prices and lower oil production. The more shielded economy of Saudi Arabia led the number of super wealthy to increase by 14.3 per cent to 104,700 people. Meanwhile, the world's population of high net worth individuals rose last year to 10 million, a gain of 17.1 per cent from 2008. Their total wealth rose 18.9 per cent to $39 trillion. Ultra high net worth individuals, who have assets of more than $30m, were responsible for 35.5 per cent of this wealth but accounted for just 0.9 per cent of the population of high net worth individuals.

The majority of personal wealth is still concentrated in the US, Japan and Germany, which together account for 53.5 per cent of high net worth individuals in the world. But, for the first time, those individuals in the Asia-Pacific saw their total wealth surpass those in Europe. The report said Asia-Pacific would be the "powerhouse" of wealth accumulation in the coming years, with China and India acting as engines for the growth.

Among those who managed to keep their head above the $1m mark in the Middle East, an increasing passion were investments in jewellery, gems and watches. High net worth individuals in the region increased their asset allocations for these luxury handcrafted items by 29 per cent, the report said. bhope@thenational.ae

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