Private wealth in the Middle East and Africa (MEA) region is projected to post a compound annual growth rate (CAGR) of 9 per cent to reach an estimated $9 trillion in 2019, according to the Boston Consulting Group’s (BCG) Global Wealth Report 2015 released yesterday (June 16).
The report also states that private wealth in the MEA region increased by more than 9 per cent to reach nearly $6trn last year.
The growth in the MEA region’s financial wealth was mainly driven by equities in the region, which continued to witness strong double-digit performance in the last 12 months. The year was also positive for onshore bonds, which also witnessed double-digit performance.
In addition to this, the MEA region had the second-highest proportion of newly created wealth (44 per cent), with the balance of the increase in wealth attributable to the market performance of existing assets.
Globally, private financial wealth grew by nearly 12 per cent in 2014 to reach a total of $164trn. Almost three-quarters (73 per cent, or $13trn) of private wealth growth was generated by the market performance of existing assets, with the balance (27 per cent, or $5trn) generated by newly created wealth. It is expected to surge to an estimated $222trn over the next five years.
North America, with $51trn in private wealth, remained the world’s wealthiest region in 2014.
Interestingly, the Asia-Pacific region (excluding Japan) overtook Europe (Eastern and Western Europe combined) for the first time to become the world’s second-wealthiest region with $47trn, according to the report.
The study also revealed that Saudi Arabia and the UAE will be major players in the region. Private wealth in Saudi Arabia is projected to rise to $2trn in 2019 with a compound annual growth rate (CAGR) of 5.3 per cent and in the UAE to $1trn with a CAGR of 10.7 per cent.
Private wealth, according to BCG, includes cash and deposits, money market funds and listed securities, as well as other onshore and offshore assets.