Israel is home to the most number of high net worth individuals (HNWIs) in the Middle East at 75,000, followed by United Arab Emirates and Turkey, a report said.
Growth in Israel was supported by the migration of over 8,000 HNWIs into the country during 2015 and well performing local equity and local real estate markets, according to the ‘Middle East 2016 Wealth Report’ by New World Wealth.
Israel also experienced strong new business formation (particularly in the local hi-tech sector), which helped in fuelling the growth of millionaires in the country, it added.
Millionaires or HNWIs refer to individuals with net assets of USD 1 million or more.
Turkey, which topped the list in 2014 with 98,000 HNWIs, saw a significant slump of 24 per cent in the number of millionaires in 2015.
Some of the reasons for this decline were that the Turkish Lira deprecated by 20 per cent against the USD in 2015 and the Turkish stock market was down by 30 per cent in USD terms in 2015.
Moreover, a large number of Turkish HNWIs left the country in 2015. Most went to the UK, UAE, Malta, Cyprus and Qatar.
“We expect millionaire migration out of certain countries in the Middle East to increase over the forecast period. In particular we expect a large number of millionaires to leave Turkey,” the report said.
Turkey is suffering from serious political and economic problems. It is also being negatively impacted by terrorism and a rising level of religious violence, it added.
The report noted that several country projections (especially Turkey, Saudi Arabia and Lebanon) are constrained by ongoing political and religious tensions in the region.
Declining oil prices are also a factor. Crude oil prices declined heavily in 2014 and 2015, which will deter further business formation and construction in these countries going forward.
Going ahead, Jordan is expected to be the fastest growing country in Middle East for HNWIs, while Iran and Israel are also expected to perform well in the next 10 years.
“Iran’s strong forecast is related to the lifting of sanctions and the expected business opportunities that should be created from that,” the report said.