Singapore, China and India posted the biggest increases in millionaires last year as the Asia-Pacific region countered a decline in wealth in western Europe and the United States, said Boston Consulting Group.
Millionaire households in Singapore rose 14 per cent to 188,000 while those in China climbed 16 per cent to 1.43 million and India saw a 21-per-cent increase to 162,000, the firm said in a report released today. Millionaire households in the US fell by 129,000 to 5.13 million.
Europe’s debt crisis and declining equity markets slowed the increase in global wealth last year with a 1.9-per-cent gain to US$122.8 trillion (S$158.2 trillion) compared with a 6.8-per-cent growth rate in 2010, the firm said.
Singapore had the highest proportion of millionaire households while Hong Kong led the rankings for the percentage of billionaires. Singapore has 17 millionaire households in every 100 with the Gulf states of Qatar and Kuwait, which were less affected by the Arab Spring than other Middle East oil-producing nations, ranked second and third, said Mr Damisch.
“It’s the first significant interruption of growth since the financial crisis,” said Mr Peter Damisch, a partner with Boston Consulting in Zurich. “Emerging markets will play a bigger role in private wealth going forward.”
Global wealth surged at a compound annual rate of almost 11 per cent from 2002 to 2007 before the financial crisis and the indebtedness of developed-market economies slowed growth, according to data.
The firm predicts a growth rate of 4 to 5 per cent over the next five years, driven by wealth creation in emerging markets.
Asia-Pacific, excluding Japan, saw an 11-per-cent increase to US$23.7 trillion and will maintain that growth rate to surpass private wealth in Europe over the next five years, Boston Consulting predicted. The region may reach US$40 trillion by 2016, it said.
Boston Consulting expects private wealth in China and India will increase by 15 per cent and 19 per cent a year, respectively, through 2016, with affluent Chinese more than US$10 trillion better off by the end of the period.
Switzerland, which came fourth with 9.5 per cent, was top of a ranking for the proportion of households with more than US$100 million, according to Boston Consulting’s 12th annual wealth management report, which surveyed 63 markets.
The Alpine country had 11 households per 100,000, followed by Singapore with 10 and Austria with eight.
Worldwide investors still increased offshore assets 2.7 per cent to US$7.8 trillion with Hong Kong and Singapore among the beneficiaries. The two biggest Asian offshore booking centres may surpass Switzerland in terms of size in the next 15 to 20 years, according to the report.
The shift in wealth growth to emerging economies poses a challenge for wealth-management firms based in the US and Europe, said Mr Damisch. Finding and keeping talent in these developing markets is a “key success factor” and businesses may need several years of investment before making a profit, the report said.
Source : Today – 2 Jun 2012