By Pratap John
Chief Business Reporter


Qatar recorded the “highest average wealth per adult” of $157,000 in the Mena region in mid-2015, growing 0.8% from the same period last year, while the UAE followed closely with $144,400, but declined 0.3% from last year, a new report by Credit Suisse shows.
Among major economies, Qatar occupied the 21st place globally in terms of average wealth, up from 29th place in the year 2000. Kuwait’s wealth per adult amounted to $113,400 –a decline of 7.6% from last year, Credit Suisse Research Institute said in its sixth annual Global Wealth Report, which was released yesterday.
The average wealth per adult in Bahrain fell 0.3% from mid-last year. The average wealth per adult in Saudi Arabia, the largest economy in the GCC, rose 0.9% from mid-2014 to reach $39,500, while Egypt’s wealth per adult fell 5.3% to $7,000.
In terms of total wealth, Saudi Arabia ranked first among GCC economies, with an estimated total wealth of $0.7tn, closely followed by the UAE with an estimated wealth of $0.6tn.
Egypt ranked first among North African nations with an estimated wealth of $ 0.4tn.
Household wealth in the Mena (Middle East and North Africa) region totalled $4.4tn in mid-2015, down 2.2% since mid-2014.
In constant currency terms, however, net wealth increased by 1.7%. Since 2000, the group of countries has increased their combined wealth by 147%, outpacing other regions such Africa and Asia Pacific. Interestingly, the growth rate in number of adults has outstripped that of all other regions over the same period, but the region did not lag behind in terms of wealth per adult growth.
The report shows that since the turn of the century, average wealth per adult grew by 62%, just below the global rate of 65%. The average wealth per adult in Mena declined by 6.9% to $15,800 in mid-2015, from $16,900 in mid-2014, although this decline is largely due to exchange rate weakness. The wealth per adult is currently some 22% below its peak in 2007, but in constant currency terms it is down just 5% from its peak.
According to Credit Suisse, global wealth fell by $13tn from mid-2014 to mid-2015, due to dollar appreciation. If measured at constant exchange rates, global wealth would have risen by $13tn since last year.
The US again led the world with a substantial rise in household wealth of $4.6tn.
China also posted a large annual rise of $1.5tn and the country now has the largest middle class with 109mn, surpassing the US with 92mn.
Switzerland again ranked highest in average wealth, but fell $24,800 to $567,100 per adult.
The report showed that wealth per adult fell by 6.2% to $ 52,400 and is now back below the level of 2013.
“A person needs just $3,210 (after debts) to be in the wealthiest half of the world. Wealth inequality has continued to increase since 2008, with the top percentile of wealth holders now owning 50.4% of all household wealth. The top 1% of wealth holders now owns half of all household wealth,” Credit Suisse Research Institute said.
Global wealth could reach $345tn by mid-2020, 38% above its mid-2015 level, according to Credit Suisse estimates.
The number of dollar millionaires worldwide could increase by 46% in the next five years, reaching 49.3mn by mid-2020.
Michael O’Sullivan, chief investment officer (UK & EEMEA, Private Banking and Wealth Management) at Credit Suisse said, “We are clearly in a growth industry, with wealth set to continue its upward trajectory. By our estimates, wealth could grow at an annual rate of 6.6%, reaching $345tn in 2020. Furthermore, the number of dollar millionaires could exceed 49.3mn adults in 2020, a rise of more than 46.2%, with China likely to see the largest percentage increase, and Africa as the next performing region.”
Credit Suisse Research Institute’s Markus Stierli said, “From 2008 onwards, wealth growth has not allowed middle-class numbers to keep pace with population growth in the developing world. Furthermore, the distribution of wealth gains has shifted in favour of those at higher wealth levels. These two factors have combined to produce a decline in the share of middle-class wealth.”

Al Rayan Bank, LCP join hands to finance Shariah-compliant London property fund
London Central Portfolio (LCP), residential fund and asset managers, has teamed up with Al Rayan Bank to finance its latest Shariah-compliant property fund, London Central Apartments III (LCA III).
LCA III, a quoted investment company, is LCP’s largest fund to date, targeting prime central London’s buoyant private rented sector. It will offer investors shares in an existing high performing portfolio of around 50 properties in some of the capital’s most desirable postcodes.
The fund, LCP’s fifth, is targeting £100mn fund raising, which will be invested to expand the existing portfolio, acquiring, renovating, letting and managing a combination of studio, one and two-bedroom units. It will be open for subscriptions until March 2016; a spokesman for LCP said.
The fund is projecting returns in excess of 10% per annum over a five year period. The minimum subscription is set at £75,000 for direct investors or £25,000 for those investing into the vehicle through regulated entities such as SIPPs (self-invested personal pensions), SSAS (small self administered scheme), ISAs (individual savings accounts) or off-shore pension schemes. Al Rayan Bank, which launched its flagship Knightsbridge branch in May, is a keen supporter of Central London property.
“Two key objectives for Al Rayan Bank have been to provide bespoke Shariah-compliant investment opportunities and to expand our presence in the real estate sector – particularly in prime central London, a favourite of both our Middle Eastern and British clients,” according to Keith Leach, chief commercial officer for Al Rayan Bank.
Last year, Al Rayan Bank’s commercial real estate finance book grew substantially, mirroring the recent growth of its retail assets.
“We are keen to strengthen our product range by bringing new, innovative products to our clients, so exploring the residential space was an obvious next step,” he said, adding “investment in prime central London property has outperformed many other investments over the last decade, and we believe that this is an exciting opportunity for investors.”
According to LCP, almost one third of subscriptions into its Shariah-compliant funds have been from the Middle East or from Shariah-conscious British Muslims, highlighting the growing demand for Shariah-compliant investment products.
“Muslim institutional and retail wealth is increasingly mobile. Political instability is encouraging Middle Eastern investors to actively look at opportunities to diversify into global markets,” Naomi Heaton, chief executive of LCP said.
The extremely beneficial tax exemptions offered by LCA III are of particular appeal to the global client base of both LCP and Al Rayan Bank, Heaton said.
“Alongside the attraction of providing a Shariah-compliant solution for Muslims to ethically access prime central London’s residential sector, investors’ interests have been further stimulated by the fact that LCA III is exempt from a range of new taxes, which buyers, acting on their own will now pay,” according to the LCP official.