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Wealth in the UAE: Sizing the Market Opportunity 2016

Published By :

Verdict Financial

Published Date : Nov 2016

Category :

Banking

No. of Pages : 33 Pages

Summary
The UAE is a dynamic market due to government attempts to diversify the economy, but it remains highly reliant on the oil and gas industry. The expat population constitutes a very large part of the affluent and HNW segments, which in addition to the relatively underdeveloped local stock markets explains why a large proportion of wealth is held offshore. Nevertheless, the future growth of onshore assets will remain positive.

Key Findings
- Despite the small number of affluent individuals, this segment controls almost 80% of total liquid assets. At the end of 2015 HNW individuals held almost 30% of the countrys onshore liquid wealth.

- The ultra-high net worth segment is forecast to record the highest liquid asset growth during 201620.

- HNW investors in the UAE hold the majority of their assets offshore. Ties to their country of origin are the main driver for offshore investments, as almost three quarters of the UAEs HNW population is made up by expats.

- UAE millionaires hold over a third of their investments in non-traditional products, with real estate investment trusts (REITs) accounting for the bulk. As the UAEs stock markets are quite underdeveloped and Muslim investors account for a large part of the UAE population, REITs are a convenient investment option, as Sharia-compliant REITs are available.

- Oil prices are still the major driver of growth, but the government has attempted to diversify the economy in order to protect the UAEs stock markets from the volatility of the oil and gas industry.


Synopsis
Verdict Financials Wealth in the UAE: Sizing the Market Opportunity 2016 analyzes the UAE wealth and retail savings and investments markets, with a focus on the HNW segment. The report is based on our proprietary datasets.

Specifically the report:

- Sizes the affluent market (both by number of individuals and the value of their liquid assets) using our proprietary datasets.

- Analyzes which asset classes are favored by the UAEs investors and how their preferences impact the growth of the total savings and investments market.

- Examines HNW clients attitudes towards non-liquid investments such as property and commodities.

- Identifies key drivers and booking centers for offshore investments.


Reasons To Buy
- Benchmark your share of the UAE wealth market against the current market size.

- Forecast your future growth prospects using our projections for the market to 2020.

- Identify your most promising client segment by analyzing penetration of affluent individuals in the UAE.

- Evaluate your HNW proposition by understanding how the UAE tax system will impact HNW clients.

- Review your offshore strategy by learning HNW motivations for offshore investments and their preferred booking centers.


Table of Contents
EXECUTIVE SUMMARY
Most of the UAE's HNW wealth is allocated offshore
Key findings
Critical success factors
SIZING AND FORECASTING THE WEALTH MARKET IN THE UAE
DRIVERS FOR GROWTH IN THE UAE WEALTH MARKET
Stock market performance affects the growth of the UAE wealth market
HNW INVESTMENT PREFERENCES
HNW individuals allocate over a third of their investible assets outside of traditional investments
UAE investors prefer commodities to alternatives
India is the most popular booking center for Emirati HNW individuals
APPENDIX
Abbreviations and acronyms
Supplementary data
Definitions
Affluent
DTC
FATCA
HNW
Liquid assets
Mass affluent
Onshore
Residency
Exchange of information
TIEAs
Methodology
2016 Global Wealth Managers Survey
Verdict Financial's Global Wealth Model methodology
Global Retail Investments Analytics methodology
Exchange rates
Bibliography
Further reading
About Verdict Financial
Disclaimer


List of Tables
Table 1: UAE taxation, 2016
Table 2: UAE: adult population segmented by affluent category and asset band (000s), 2011?15
Table 3: UAE: adult population segmented by affluent category and asset band (000s), 2016f?20f
Table 4: UAE: total onshore liquid assets segmented by affluent category and asset band ($bn), 2011?15
Table 5: UAE: total onshore liquid assets segmented by affluent category and asset band ($bn), 2016f?20f
Table 6: Emirati dirham to US dollar exchange rate, December 31, 2014 and December 31, 2015


List of Figures
Figure 1: UAE's HNW individuals account for less than 1% of the total population
Figure 2: UAE's millionaires account for less than 1% of individuals but hold almost a third of liquid assets
Figure 3: The UAE's retail savings and investments market is set to grow steadily
Figure 4: Stock market performance affects the growth of the UAE wealth market
Figure 5: GDP growth strongly affects investments
Figure 6: REITs constitute the bulk of investments outside traditional asset classes
Figure 7: Bonds are the most popular asset class
Figure 8: Ties to the offshore country and tax efficiency drive investors
Figure 9: India is the most popular booking center for Emirati HNW individuals
Figure 10: The UAE has 72 DTCs in force

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