Bahrain’s wealth ‘resilient despite turbulent climate’

MANAMA: Showing resilience in the face of the protracted Covid-19 pandemic, Bahrain’s financial wealth has grown significantly since 2015, reveals a study.

Unveiled yesterday, Boston Consulting Group (BCG)’s Global Wealth 2021: When Clients Take the Lead report Bahrain’s financial wealth grew by a compound annual growth rate (CAGR) of 4.9 per cent from 2015 to reach a high of $69 billion in 2020 – 75pc of which is investable wealth.

“Bahrain’s wealth has remained resilient despite the turbulent climate following the Covid-19 outbreak. This viewpoint is substantiated through the data, which illustrates growth over the past five years, with Vision 2030 supporting global economic activity. As a result, growth in wealth has been recorded, positioning the kingdom to make progress through 2025 and beyond,” said Mustafa Bosca, managing director and partner at BCG.

Bahrain, which represented 3pc of the GCC financial wealth in 2020, is expected to witness strong growth of 3.6pc CAGR to reach $82bn by 2025, a $13bn increase from 2020.

As much as 61pc of the country’s wealth is owned by individuals whose net worth is more than $5m.

The report finds that despite the pandemic’s enduring financial impact, global prosperity grew throughout the crisis and is likely to continue to expand significantly over the next five years, in line with the emerging economic recovery.

Meanwhile, the region’s financial wealth is forecast to reach $2.7 trillion in 2025 from $2.2trn in 2020.

A spotlight on onshore asset allocation shows that equities and investment funds (50pc) accounted for the largest proportion of assets in 2020.

Looking ahead, the allocation of onshore assets by 2025 is expected to be similar, with equities and investment funds set to be the largest share of onshore asset allocation in Bahrain, amounting to 48pc.

BCG’s report also shows the country’s changing landscape of the wealthy in the coming years, with the rise of the next-generation affluent and high-net-worth clients.

These individuals, between 20 and 50 years of age, have longer investment horizons, a greater appetite for risk, and often a desire to use their wealth to create positive societal impact as well as earn solid returns. Many wealth managers are not yet ready to serve these new ultras.

“Sustained economic achievements have led to new entrants among Bahrain’s wealthy. Because wealth is being distributed to more members of the population, it is likely that client demands and expectations will also shift as wealth demographics continue to experience change. With this in mind, those responsible for local wealth management will be tasked with proactively tailoring their offerings to local needs or younger wealth segments in due course,” added Mr Bosca.




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