One in 67 in UAE has millions - Weak markets hit millionaires' ranks

NEW YORK, June 13, (<a href=www.arabtimesonline.com>Agencies): The ranks of the world's millionaires increased in 2002, but at a slower pace than in the past because of weak global economies and stock market declines. An annual study released Wednesday estimates that there were 7.3 million people in the world with financial assets of $1 million or more at the end of 2002, up 2.1 per cent from the previous year. The increase, down from 3 per cent in 2001, was the lowest rise in the survey's seven-year history. The numbers of millionaires actually dropped last year in North America, which includes Canada and the United States, and in Latin America, but rose in other regions. The wealth these people have amassed, meanwhile, grew 3.6 per cent in 2002 to $27.2 trillion, compared with growth of 3 per cent in 2001 to $26.2 trillion, the study showed. In market boom years such as 1999, millionaires saw their wealth grow as much as 18 per cent. The "World Wealth Report" was prepared by the Merrill Lynch brokerage firm and the Cap Gemini Ernst & Young consulting firm. Brokers, bankers and other financial experts watch the figures closely because people with high net worth tend to be their best customers, although they represent just a small fraction of the world's 6.3 billion people. James P. Gorman, executive vice president of Merrill Lynch and head of its private client group, said that the fact that there were more millionaires in the world despite global economic difficulties "reflects the resilience of this very attractive market segment." The study predicts, too, that their wealth will increase an average of 7 per cent a year over the next five years to $38 trillion at the end of 2007. Gorman said that wealthy individuals were not hurt as badly by stock market declines because they tend to be conservative investors. He said that the typical high net worth individual last year had 30 per cent invested in fixed-income instruments such as bonds and 25 per cent in cash, with just 20 per cent in equities. Their other holdings included 15 per cent invested in real estate and 10 per cent in alternative investments, such as hedge funds. That shows, he said, that "a properly diversified portfolio is resilient even in the most difficult market environments." James S. Greene, a vice president at Cap Gemini, said that the wealthy were helped in both preserving and increasing their assets by an average of seven to nine financial advisers, from planners to accountants, brokers and lawyers. On a regional basis, the number of millionaires declined in North America, where stock markets fell sharply, and in Latin America, where economic and political turmoil took a toll, the report said. Their ranks increased, meanwhile, in Africa, the Middle East, Asia-Pacific and Europe, it said. The study's regional breakdown: ** Europe. The region with the largest number of millionaires, Europe saw the ranks of its high net worth individuals rise 3.9 per cent to about 2.6 million, while their wealth rose 4.8 per cent to $8.8 trillion. The report cited strong economic growth in emerging European economies and appreciation of the euro and British sterling against the dollar. ** North America. The number of millionaires fell 1.9 per cent to about 2.2 million, while their wealth fell 2.1 per cent to $7.4 trillion. Problems from weak economic growth were compounded by "a significant drop in stock market capitalization and decrease in savings rates," the report said. ** Asia-Pacific. This region had the strongest growth in both the number of high net worth individuals, up 4.9 per cent, to 1.8 million people, and wealth, up 10.7 per cent to $5.7 trillion. The report said solid economic growth and continued high savings rates outweighed mixed market and currency performances. ** Latin America. The number of high net worth individuals declined 3.6 per cent to 300,000, but their wealth rose 2.7 per cent to $3.6 trillion. The report noted that economic growth was weak in Brazil and Mexico, while the oil crisis in Venezuela and crash of the Argentine peso sparked recession. ** Middle East. The number of wealthy individuals rose 4.7 per cent to 300,000, while their wealth increased 4.6 per cent to $1.1 trillion. ** Africa. The region saw its wealthy population increase 4.9 per cent to 100,000, while their wealth rose 4.3 per cent to $600 billion. Also: DUBAI: One out of every 67 people in the oil-rich United Arab Emirates (UAE) is a dollar millionaire, a newspaper said Thursday, citing the "World Wealth Report." The number of "high net worth individuals" in the UAE with financial assets of more than one million dollars grew last year to 45,000 from 40,000 a year earlier, the survey by Cap Gemini Ernst and Young with brokerage Merrill Lynch showed, said Khaleej Times. The report, which was released in Dubai as well as in New York on Wednesday, showed that the number of millionaires around the world had grown to 7.3 million last year, despite a fall in the United States. With the total UAE population estimated at more than three million, the millionaire segment, including nationals and expatriates, accounts for some 1.5 per cent, Khaleej Times said. Expatriates, most of them low-paid Asian labourers, make up 80 per cent of the UAE's population.