The number of millionaires in the Middle East swelled 10.4 per cent in 2010 to 400,000, while their wealth jumped 12.5 per cent to $1.7 trillion, a report said.

Meanwhile, the ranks of millionaires in Asia for the first time surpassed Europe and in a few years are expected to overtake the United States, according to the latest annual Merrill Lynch-Capgemini World Wealth Report.

Powered by fast-growing China and India, the Asia-Pacific region's millionaire ranks rose 10 percent to 3.3 million, second only to the 3.4 million residing in North America and inching ahead of Europe, which had 3.1 million.

Asia's combined wealth, up 12 percent to $10.8 trillion last year, surpassed Europe and threatens to overtake the United States and Canada, where wealth rose 9 percent to $11.6 trillion.

'Their capital markets may be emerging, but their economies have clearly arrived,' John Thiel, head of Merrill's private banking group and its 'Thundering Herd' of 15,700 US brokers, told Reuters. 'They're not 'emerging' anymore.'    

More than half of the world's millionaires are still found in the United States, Japan and Germany, but that the wealthy are spread among more countries, according to Merrill and global consulting firm Capgemini.

Assets held by millionaires worldwide rose by 9.7 percent to a record $42.7 trillion -- surpassing the previous high-water mark set in 2007 -- while the ranks of people with at least $1 million of investable assets, excluding their primary residence, rose 8.3 percent to 10.9 million, the report found.   

Some of that growth came as manufacturing, exports and domestic growth helped places like Hong Kong, Singapore and India create legions of members for the millionaires' club.

The findings echo a PricewaterhouseCoopers report published Monday, which found that Singapore and Hong Kong could surpass London and Switzerland as the world's top wealth management hub by 2013.

Investable assets held by the very rich grew as stocks and other financial markets continued to climb from the depths of the 2008 financial crisis. Asia-Pacific millionaires, the survey found, were more heavily invested in local real estate.

In the Middle East, more than 50 per cent of the total population is estimated to be below 25 and the HNWI population is also younger than average: 21 per cent are 45 or under and 56 per cent are 55 or under.

Faith in equity markets is slowly returning, thanks to two strong years of gains since the panic of March 2009. Global equity holdings rose 4 percentage points last year to 33 percent of financial assets, back to the pre-crisis levels.   

That said, the world's rich still placed a premium on liquidity, or how easily investments can be sold.   

Thiel noted that investors in developed nations are still reacting to the fallout of the financial crisis, including Europe's sovereign debt crisis, the massive US budget deficit and a real estate slump.

'Our clients are still a little risk-averse about increasing that exposure. There's still plenty of things to worry about domestically and internationally,' Thiel said. - Reuters and TradeArabia News Service