Hot News Headlines
SEARCH
Business News

Bahrain's rich list shrinking

MANAMA: The number of seriously rich people in Bahrain is dwindling.

Last year the number of US dollar millionaires in the kingdom fell by more than 1,000 as the global financial crisis saw the richest people in the world get a fair bit less rich.

There are now only 5,000 people who have liquid assets of $1 million or more in the kingdom, compared with 6,200 at the start of last year.

That is an almost 20 per cent slump at a time when globally the number of seriously rich people also declined.

Globally there are now only 8.6m millionaires and they have seen their combined wealth fall by 19.5pc to just $32.8 trillion.

And the bad news for the rich and famous is that things are likely to get worse before they get better, according to the 13th annual Merrill Lynch Global Wealth Management and Capgemini report. And in the short term, things look less than healthy for Bahrain's rich and famous.

The period that saw 1,200 people no longer able to boast they were millionaires, was characterised by a fall in economic growth from 8pc to 6.1pc. But the producers of the report are forecasting this will slump to just 1.8pc this year.

The seriously rich brigade suffered worse than the poor millionaires as the $30m plus brigade suffered more extensive losses in financial wealth than the people struggling on their last million as their wealth dropped by 23.9pc with their numbers down by almost a quarter.

In the UAE and Saudi Arabia, the millionaire population fell, but at a rate lower than the global average.

The UAE had 12.7pc fewer, down to a total of just over 67,000. In Saudi Arabia, there were over 91,000, down 10.9pc from the previous year.

"This year's World Wealth Report shows a distinct shift from our reports in recent years," said Merrill Lynch Middle East resident director Jonty Crosse.

"After a year of significant volatility, we're seeing a shift in millionaire activity and priorities.

"There are currently opportunities for wealth management firms and advisers to understand and effectively address increased client concerns by helping to navigate through the uncertain economic times and build relationships that will continue well into the future."

But the good news for the almost financially challenged is that in the longer term things are going to get better.

"Overall millionaires financial wealth is expected to grow to $48.5trn by 2013, advancing by an annual rate of 8.1pc," he said.

Last year, the rich folk reduced their exposure to equities and increased the proportion of their assets in safer and simpler investments.

More income was allocated to fixed-income investments, cash and liquid assets. Additionally, they allocated slightly more of their financial assets to real-estate holdings, which rose to 18pc of their total global portfolio - an increase of 4pc from 2007.

The proportion of cash-based holdings also significantly increased, to 21pc of overall portfolios and up 7pc from 2006.

"Last year was about preservation, not appreciation," said Mr Crosse,

"With no safe havens millionaires ended up with significant amounts of cash in their portfolios. As markets recover, they will have the flexibility to readjust their strategies and reinvest in new, developing opportunities along the way."

business@gdn.com.bh



default img Print Email Write comments  Bookmark and Share  
More Stories

click on image to view the digital edition