Global Islamic Wealth Insights July 2013 - Malaysia International ...

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Global Islamic Wealth Insights July 2013 - Malaysia International ...

InsightsGLOBAL ISLAMIC WEALTHJuly 2013The world’s population of high net worth individuals (HNWIs)continues to grow, despite economic uncertainties and slowerregional growth in recent years.In contrast, global household wealth is estimated to have declined by 5.2% in 2012 on the back ofthe ongoing sovereign debt crisis and lacklustre economic growth in Europe as well as significantcurrency depreciations. Nevertheless, regional series show that household wealth has continuedupwards, which reinforces the view that the underlying trends have been, and continue to be, broadlypositive. Even adjusting for the rise in the global population and for exchange rate fluctuations,net worth has increased by 38% since the year 2000, equivalent to 2.7% growth per annum. Assuch, global wealth is estimated to be at USD219tln as at end-2012. Particularly, wealth in the GCCcontinues to grow with an estimated USD1.2tln in investible assets (KFH Research). The region, whichtraditionally invests mostly in illiquid assets, is expected to witness further growth in wealth given thepetrodollar surpluses and encouraging population demographics.Particularly, wealthin the GCC continuesto grow with anestimated USD1.2tlnin investible assets.The global economy is steadily improving, with forecasts ofalmost 3% growth in the world’s leading economy for the fullyear 2013. Europe is still expected to remain weak over the neartermbefore witnessing growth again in 2014. The GCC and Asiaregions will continue to be the engine of growth, albeit slightlylower than growth in 2012. The GCC region is expect to seemoderate growth of 4.0% to 4.5% on moderating oil demand,while the economies of Asia ex Japan are expected to growfurther by 6.8% in 2013, up from 6.1% in 2012 (KFH Research).Total Net Wealth, 2012 (USD bln)Change in Total UHNWI Population(2011-2012E)Source: CapgeminiSource: CapgeminiAfter several years of avoiding stocks, investors started coming back into the equity markets earlythis year, perhaps, signalling the end of a period characterised by massive outflows and risk-averse,macro-driven markets. The Islamic equity market has proven to be not only the most effective,transparent, liquid and conducive to small and big size investors as a means of investment, but italso outperformed all other asset classes where return on investments is the parameter considered.The total number of HNWIs around the world has increased despite the economic and politicalconundrum. This bodes well for the real estate sector as the HNWIs continue to place their wealthin real estate substantially. Similarly, Islamic Real Estate Investment Trusts (iREITs) have performedsteadily in terms of the income generated from rental income and capital gains and have maintaineda healthy dividend pay-out rate.www.mifc.com1


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