WHO HOLDS THE WEALTH IN THE MIDDLE EAST.

http://www.mei.edu/content/wealth-management-industry-middle-east-boon-or-bust



In the Middle East, most assets lie in the hands of very few ultra-high net worth individuals. According to the annual Merrill Lynch-Cap Gemini World Wealth Report for various years, North American and European wealth tends to spread out at roughly a ratio of $3 million to every ultra and regular high net worth individual in the region. The MENA region — despite the World Wealth’s Report’s data — has ratios closer to 7-to-1. The high concentration of wealth in the region provides wealth management and private banking firms a unique opportunity to service relatively few ultra-high net worth clients without the expense of servicing large numbers of clients. Moreover, the political uprisings in the region will likely do little to dampen accumulation of wealth in the region. Several studies — the Steiner (2010) study being the most prominent — show (rather counter-intuitively) that political uprising has little effect on foreign investment.
The rise of the wealth management industry in the MENA region has been caused by the better than average returns to oil investments (combined with their relative volatility). Figure 2 shows the way that overall equity prices and oil prices have changed in roughly the last 5 years. During the period, oil prices almost doubled at their peak in 2008 and halved again in about the same year. In contrast, global equity prices in general did not fall as much. The standard deviation (the measure of volatility in these prices and thus a proxy for risk) was 1.6 times higher for oil than for equities. Higher standard deviations for oil prices, and thus incomes based on oil, imply that the Middle East’s wealthy require wealth managers who can help them ride out these waves of uncertainty.