Despite the falling oil price and geopolitical instability, the states of the Gulf Cooperation Council (GCC) remain an attractive investment destination for high net-worth individuals (HNWIs), a report said, adding that 76 per cent prefer to keep their assets close to home.
However, there is a clear element of caution lingering amongst investors, according to the 2016 GCC Wealth Insight Report published by the Dubai-based Emirates Investment Bank (EIBank).
For the purposes of this study, HNWIs are defined as individuals with US$2 million or more in investable assets. The Report outlines the views of High Net-Worth Individuals (“HNWIs”) from across the Gulf Cooperation Council (GCC) on local and global economies as well as the main elements that drive their investment and banking decisions.
Commenting on the regional economic situation, Khaled Sifri, CEO of Emirates Investment Bank, said, “With the global economy currently going through a period of significant volatility and with depressed oil prices, it comes as no surprise that this yearâ€™s Report is more sombre than in previous years.”
“However, confidence in markets such as the UAE and Qatar remains very strong and, when taking a longer-term view, HNWIâ€™s say they are optimistic about the Gulf region as a whole. Consistent with previous years, the majority of GCC HNWI investors prefer to invest in the region over global markets, despite any geopolitical concerns,” Sifri added.
Looking at the individual countries of the GCC, the report asked HNWIs for their views on the economic situation in their own country. The most positive responses were from the UAE and Qatar, where 58 per cent and 42 per cent, respectively, said they felt the situation was improving (89 per cent and 83 per cent, respectively, in 2015).
HNWIs were least positive in Kuwait, Bahrain and Saudi Arabia, where just 8% of respondents in each country said they felt the situation was improving. HNWIs in Oman are most likely to feel that the economic situation in their country is worsening (67%). Saudi Arabia has seen the biggest shift in sentiment, with 59% of respondents in the 2015 Report saying that they felt their economy was improving.
Similar to the 2015 report findings, a significant majority of HNWIs (76 per cent) prefer to keep their assets closer to home. Amongst HNWIs who prefer to keep their assets close to home, almost half (47 per cent) say this is because they are confident that investments in the region are secure. Other reasons cited include the ability to oversee investments (18 per cent) and familiarity with the risks and regulations (16 per cent).
The GCC Wealth Insight Report 2016 is based on a survey of HNWIs from the United Arab Emirates, Qatar, Kuwait, Saudi Arabia, Oman and Bahrain. Face-to-face interviews were held in each country between September and November 2015 among the national population as well as expatriates. For the purposes of this study, HNWIs are defined as individuals with US$2 million or more in investable assets.