Insight
While the global health crisis, in its third year running, did pose an existential question for many businesses worldwide, the investment landscape remained fairly upbeat, with the straining economic climate encouraging people to preserve and grow their wealth.
“The pandemic has led to an increase in risk appetite because some people had to get out of their comfort zone and start looking at alternative ways to generate passive income. Some people lost their jobs, where some were on docked salaries. So, there was a serious concern of people starting to spend from their savings without any future returns. This [situation] has turned to our advantage,” says Fadi Dabbagh, Board Advisor at Dubai-based AIX Investment Group.
“We have especially noticed a very high increase in first-time investors – people that never invested before have actually started doing so now. This trend has expanded a lot since Covid started.”
Numbers back the optimism: the UAE’s financial wealth grew by a compound annual growth rate (CAGR) of 3 per cent from 2015 to reach $600bn in 2020, 69 per cent of which was investable wealth, according to a Boston Consulting Group (BCG) report. The UAE, where 51 per cent of the country’s wealth is owned by people whose net worth is more than $5m, represented 26 per cent of the GCC’s financial wealth in 2020, which itself is projected to reach $2.7 trillion in 2025, up from $2.2 trillion in 2020.
Read more in the February 2022 issue of Gulf Business: