why the Gulf’s most wealthy are more optimistic


High net worth individuals (HNWI) in the Gulf region are  much more positive about the condition of the global economic situation than they have been in the last three years, according to new research.
Emirates Investment Bank said in the 2019 edition of its annual GCC Wealth Insight Report that higher oil prices and increased investment opportunities were highlighted as the main factors for optimism.
Nearly half (45 percent) of respondents said they believe the global economic situation is improving, and more than three quarters of HNWIs (85 percent) were optimistic about the economic prospects for the global economy over the next five years.
The sixth edition of the report is based on an independent survey of HNWIs from across the Gulf conducted in November 2018.
In addition to the optimism towards global economic growth, confidence in local and regional growth is more prominent and is strengthening in 2019, according to the survey results.Views of an improved economic and business environment in the GCC more than doubled among HNWIs leaping from 31 percent to 71 percent of respondents, with just 3 percent feeling that the situation is worsening, down from 41 percent last year.
The vast majority of HNWIs (96 percent) surveyed said they are optimistic that stabilised oil prices, upcoming high-profile events, and the benefits of economic diversification and reforms will induce a robust environment for businesses.
This positive sentiment has prompted HNWIs to continue to keep their assets closer to home, in line with previous years, with an even further increase in wealth allocation towards their own businesses. Preference for investing locally was also prominent in this year’s survey, where three quarters of HNWIs believe that investment opportunities in their home markets are more lucrative than diversifying abroad.
In addition, a large proportion of the 84 percent of respondents who said that they have changed their investment approach as a result of geopolitics, have decided to focus more on investing in their local markets.
While real estate continues to receive considerable exposure from GCC HNWIs (70 percent), technology is emerging as a sector of interest for regional investors, with a quarter of them currently allocating wealth to technology and as many saying they will increase their exposure to this sector in the coming 12 months.
Respondents cited the sector’s growing importance in the next phase of growth across multiple industries as the fundamental factor for this view.
Khaled Sifri, CEO of Emirates Investment Bank, said: “The size of home-grown wealth in the GCC region and the entrepreneurial culture it is known for gives the investment landscape in the region a unique characteristic.
“This explains the increased optimism and confidence we saw in this year’s findings, and the growing appetite among the region’s wealthy to grow their wealth instead of preserving it, compared to last year where there was an increase in wealth preservation over previous years.”
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