Mideast’s ultra-rich ‘not linked to oil’
FOR most ultra-high net worth individuals (UHNWIs) in the Middle East, the oil sector is not the source of their wealth, according to a new research.
The typical Middle Eastern UHNWI is not an oil baron, said the study conducted by Wealth-X, a UHNW business development solution for global private banks, luxury brands, educational institutions and non-profit organisations.
“He or she is most likely to represent the finance and banking sector or an industrial conglomerate,” said Wealth-X director of business development, Middle East and Africa, Michel Nassif.
Collectively, Middle Eastern UHNWIs own $26 billion worth of luxury assets, ranging from private aircraft to art and other collectibles, it said.
According to Wealth-X, the average Middle Eastern UHNWI is married, 56 years old and self-made with an average net worth of $151 million and liquid assets of $46 million. On average, Middle Eastern UHNWIs each own $5.7 million worth of luxury assets.
Although 55 per cent of the total UHNW population in the Middle East are self-made individuals, 14 per cent of them inherited their wealth and 31 per cent have built upon their inherited wealth. Gender representation is skewed with female UHNWIs at 6 per cent of the UHNW population.
High oil revenues ‘to underpin GCC growth’
HIGH oil revenues and strong non-oil growth will underpin robust GCC economic performance in 2013, according to a new report from Fitch Ratings.
Fitch’s newly-published quarterly GCC Sovereign Credit Overview trimmed the economic growth forecasts for the GCC owing to a slightly more pronounced cut in oil production than previously expected.
Oil market trends remain supportive for the region, though less so than in 2012. As a result of tight fundamentals and generally improving sentiment about the global economy Fitch has raised its Brent oil price forecast to $105 per barrel for 2013.
However, Saudi Arabia has sharply cut back oil production so far this year and with other regional producers at close to capacity the oil sector will be a drag on overall economic growth across GCC sovereigns in 2013, the report said.
Bumper oil revenue will allow GCC governments to impart further stimulus while strengthening their balance sheets, it said. 2013 budgets for Saudi Arabia and Oman are expansionary and buoyant spending will be bolstered by high levels of business and consumer confidence and healthy growth in bank lending.
Non-oil growth in the UAE is picking up, led by Dubai, where indicators of trade, tourism and logistics are close to record highs, said the report.
Kuwait budget surplus to top $50bn
AN oil price of between $101 and $118 per barrel in 2013-14 could generate a budget surplus for Kuwait of up to KD16 billion ($56 billion) next fiscal year, following a surplus of KD14 billion ($50.4 billion) in 2012-13, a report said.
Crude oil prices continued to rally in the first half of February on increased optimism over the global economic outlook, but these gains were subsequently reversed, helped by a stronger US dollar, added the latest Kuwait Economic Brief released by the National Bank of Kuwait (NBK).
Meanwhile, Kuwait’s inflation slowed to 2.3 per cent year-on-year (y/y) in January, down from 2.6 per cent the previous year owing to a sharp drop in food prices, according to a report.
The deceleration stemmed mostly from a fall in the y/y rate for food prices. The consumer price index (CPI) eased a little in January down from 2.9 per cent average for the previous year 2012, it stated.
The core inflation, which excludes food and beverage prices, recorded 2.6 per cent y/y in January, similar to December’s 2.7 per cent.
GCC Islamic bank assets surge 14pc
SHARIA-compliant assets at commercial banks in the GCC region climbed 14.1 per cent from a year earlier to $445 billion at the end of 2012, according to a report.
While Islamic banking assets posted solid growth the conventional banking assets grew by only 8.1 per cent – indicating the relative resilience and potential of the industry, said the report by the E&Y Global Islamic Banking Centre.
Qatar was the fastest growing market where Islamic banking assets seemed to have grown by more than 23 per cent during 2012, the report added.
Ashar Nazim, the partner at E&Y Global Islamic Banking Centre, said he expected a relatively positive outlook for the Islamic banking industry in the GCC.
Bahrain’s growth put at 4pc
BAHRAIN’S central bank expects economic growth of around 4 per cent for the kingdom this year, its governor Rasheed Al Maraj has said.
Al Maraj’s forecast was lower than that of the government’s Economic Development Board, which recently predicted gross domestic product would expand 6.2 per cent in 2013 after an estimated 3.9 per cent in 2012.
He said he expected inflation averaging around 1.5 per cent this year. In January, inflation was 3.6 per cent; analysts polled by Reuters in January predicted average inflation of 2.4 per cent in 2013, down from 2.8 per cent in 2012.
Al Maraj said he was satisfied with the level of inflation and the health of the banking sector.
Dubai trade with Iran shrinks
DUBAI’S trade with Iran plunged by a third in 2012, the Dubai customs authority said, indicating how much US financial sanctions are hurting Iranian business with the rest of the world.
Dubai, across the Gulf from Iran and home to tens of thousands of ethnic Iranians, has long been a major commercial hub for Iran, serving in particular as a channel for consumer goods imports into that country.
This role was damaged after US sanctions, imposed in late 2011 over Iran’s disputed nuclear programme, made it legally dangerous for banks around the world to deal with Iranian institutions. Banks in Dubai sharply cut back Iran-related dealings.
Two-way trade between Dubai and Iran was roughly Dh25 billion ($6.8 billion) last year, said Ahmed Butti Ahmed, director general of Dubai Customs. That implied a drop of about Dh31 per cent from Dh36 billion in 2011. Sharp depreciation of the Iranian currency, which lost more than half its value against the US dollar last year, hurt business in addition to the reluctance of Dubai banks to get involved, Ahmed told a news conference.
He said merchandise trade with Iran now represented about 2 per cent of Dubai’s overall trade.