Global HNWI wealth growth bypasses Middle East

Every region in the world saw an uptick in the wealth of high-net-worth individuals (HNWI) last year — except ours. The Middle East stood out as the only region not to catch the upside of growth in both HNWI wealth and population.

HNWI wealth was up 8.7% last year globally, reaching USD 98.3 tn, with 2 mn more people becoming m’naires, according to Capgemini’s latest World Wealth Report. AI-linked investment and strong corporate earnings drove the results, and the stock market portion of HNWIs’ portfolios rose to 25%.

Not in our neck of the woods: In the Middle East, wealth was down 1.5% last year, while the overall HNWI population dropped 1.4%, with the report citing pressure on fiscal coffers from lower oil prices, weak labor markets, and regional instability as the primary drivers of the contraction.

The regional decline occurred despite the global population of ultra-high-net-worth individuals (UHNWI) growing 9.7% y-o-y to 250k, thanks to exposure to lucrative private and public assets. UHNWIs now hold 34.8% of overall HNWI wealth globally.

The US came out on top for HNWI count, recording 736k new m’naires to bring its total to 8.7 mn, with tech being a key driver of wealth creation. Some 40% of returns from the S&P 500 came from the top seven tech firms. Europe, Latin America, and Africa also saw HNWI growth. The Asia Pacific region led in terms of wealth growth, which rose 10.5% on the back of demand for semiconductors.

A bleak outlook? It seems more HNWIs are staying put this year. Last year, 56% of HNWIs said they had or were planning to change their primary tax residence, but this year, only 25% plan to do so, the Financial Times reports, citing a Capgemini survey.

The sad part: The Middle East was actually on track for a significant influx this year — 13% of respondents said they were looking to relocate to the region, the highest share of any other region. However, Gareth Wilson, global banking industry leader at Capgemini, said this sentiment existed before the Iran war, expecting next year’s numbers to tell a different story.

The UAE — and the wider GCC — was well positioned to catch a larger intake of HNWIs who were relocating from countries like the UK in search of more favorable tax policies and investment environments. However, the regional war has prompted many HNWIs in the UAE to either leave or scout for other locations for long-term residency, with inquiries for Henley & Partners’ UAE residence program down 13% in 1Q.

MARKETS THIS MORNING-

Asian tech shares are dragging markets down, as they track losses among US chip stocks. South Korea took the brunt of it, with stocks like Samsung and Seoul Semiconductor dragging the index down more than 5%. Japanese and Taiwanese tech stocks also fell, though Taiwan Semiconductor Manufacturing Co. bucked the trend, rising 0.4%.

THE CLOSING BELL-

The ADX remained flat yesterday on turnover of AED 998.6 mn. The index is down 4.1% YTD.

In the green: Al Buhaira National Ins. Company (+13.7%), Phoenix Group (+5.1%), and Agility Global (+3.8%).

In the red: Fujairah Building Industries (-4.2%), Mair Group (-2.9%), and Abu Dhabi National Hotels Co. (-2.8%).

Over on the DFM, the index rose 0.6% on turnover of AED 837.5 mn. Meanwhile, Nasdaq Dubai remained flat.