Private wealth to rise 4.5 per cent to $0.2tn by 2021

Manama : Private wealth growth in Bahrain witnessed a slight growth of 3.9 per cent in 2016, with private wealth expected to reach approximately $0.2 trillion in the next five years, according to a new report published yesterday.  

A report by The Boston Consulting Group (BCG), Global Wealth 2017: Transforming the Client Experience, revealed that the growth of private wealth was driven primarily by equities.

In 2016, the amount of wealth held in equities increased to 5.8pc, in comparison to cash and deposits at 3pc and bonds at 1.6pc. Based on the report overall growth of wealth in Bahrain is expected to increase steadily to 4.5pc Compound Annual Growth Rate (CAGR) over the next five years. 

Equities, at 6.7pc CAGR, and cash and deposits, at 3pc CAGR, will be the primary contributors to this growth rate over the coming five-year period.  

According to the report, private wealth held by ultra-high-net-worth (UHNW) households (those with above $100 million) in Bahrain experienced robust growth — at 7.6pc — in 2016. The growth experienced by this segment is expected to continue at a steady pace; 9.8pc CAGR through 2021.The upper high-net-worth (HNW) segment (those with between $20m and $100m) experienced very slight growth in 2016 at 0.6pc. In the next five years, the projected growth of this segment will see a decrease to -1.1pc CAGR. In Bahrain, private wealth held by the lower HNW segment (those with between $1m and $20m) witnessed burgeoning growth of 6.1pc in 2016. Private wealth in this segment has a projected CAGR of 7pc over the next five years. The total number of millionaire households (those with more than $1m in net investable assets) in Bahrain increased by 1pc CAGR in 2016. Looking ahead, growth is set to decline slightly at 0.4pc CAGR by 2021.

 “In the Middle East and Africa, wealth expansion should stem, in relatively equal portions, from existing assets and higher household savings,” said Markus Massi, Senior Partner & Managing Director of BCG Middle East’s Financial Services practice. 

 “Looking ahead, the share of wealth allocated to each asset class is expected to remain stable, with regional wealth projected to rise at an annual rate of roughly 8pc through 2021. In the coming years, more local players will enter the wealth management market as traditional revenue pools become more competitive,” he said.