Asia-Pacific overtakes Europe on the rich list

[Musicwhiz]

Is it just me? Can't these "surveys" simply STOP measuring how RICH people here are? It's getting to be extremely disconcerting and makes us seem like we are so focused on wealth and materialism!

Jun 24, 2011
Asia-Pacific overtakes Europe on the rich list
Ranks of high-net-worth individuals in region increased 9.7% last year

THE number of wealthy people in Singapore surged 21.3 per cent last year to more than 99,000, thanks to bumper returns from real estate and equities.

Hong Kong did even better, outpacing the rest of the world with its number of wealthy residents shooting up 33.3 per cent to 101,300.

In fact, the ranks of the rich expanded so much in the region last year that the number of wealthy people in the Asia-Pacific has now outstripped that of Europe, according to an annual report compiled by Merrill Lynch Global Wealth Management and Capgemini.

Asia-Pacific's population of high-net-worth individuals grew 9.7 per cent to 3.3 million last year, with their wealth gaining 12.1 per cent in value to US$10.8 trillion (S$13.4 trillion).

Europe's number rose 6.3 per cent to 3.1 million, with their wealth expanding 7.2 per cent to US$10.2 trillion.

High-net-worth individuals are people with investible assets of US$1 million or more, excluding their primary residence.

'Asia-Pacific's continued strong performance cements the region's strategic importance to every wealth management firm with global aspirations,' said the head of Asia-Pacific wealth management at Merrill Lynch Global Wealth Management, Mr Michael Benz. 'Now the world's second-biggest high-net-worth individuals market in terms of population and wealth, it is more pertinent than ever for the wealth management industry to keep enhancing their service to this diverse region.'

According to the report, six out of the 10 economies with the highest growth in high-net-worth people last year were in the Asia-Pacific.

The number of wealthy people in Vietnam grew by 33.1 per cent, making it the second fastest in terms of growth in the world, behind Hong Kong.

Sri Lanka, Indonesia, and India all saw their wealthy populations rise by more than 20 per cent.

However, North America is still home to the biggest population of the world's rich, with the number of high-net-worth individuals there growing 8.6 per cent to 3.4 million people last year. Their wealth expanded 9.1 per cent to US$11.6 trillion.

More people joined the ranks of the wealthy as stock markets, commodities and real estate turned in healthy performances, said the report.

The wealthy in different regions had varying asset allocation strategies.

In Asia-Pacific, excluding Japan, the super-rich particularly liked real estate - property accounted for 31 per cent of their aggregate portfolio at the end of last year. The global average was 19 per cent.

Investors from North America were more bullish on equities and kept 42 per cent of their holdings in stocks.

Japan's super-rich were the most conservative in the world, and held 55 per cent of their aggregate portfolio in fixed income and cash or deposit vehicles.

Investors from developed markets also cashed in on the higher interest rates offered by some developing economies.

Meanwhile, international bond markets grew, 'as investor confidence returned to financial markets, providing more demand and liquidity for financial institutions, corporations and governments looking to issue debt', the report noted.

Some of the added wealth also came from hedge funds - the Dow Jones Credit Suisse Hedge Fund Index finished last year up 11 per cent and above pre-crisis levels.

'Hedge funds had experienced hefty redemptions and sharp declines in asset values during the crisis but net inflows started to pick up significantly in the second half of 2010,' said the report.

yasminey@sph.com.sg

[egghead]

Well, the survey was carried out by Merrill Lynch Global Wealth Management which I believe has the intention to use the survey results to serve their purpose. The question really is why does SPH find this newsworthy since it was only not so long ago when a similar survey was reported.

[Musicwhiz]

The question really is why does SPH find this newsworthy since it was only not so long ago when a similar survey was reported.

I attribute it to our culture of self-praise. Our media is especially good at this......

[redcorolla95]

This is newsworthy for at least a few reasons:

- It's a data point in whether or not you think govt's economic policies are successful. The fact that the upper middle class is benefiting together with classes that are benefiting less.
- The fact that there're more rich people in Asia-Pacific than the Europe, even though GDP & GDP per capita in Europe are much higher, and that lots of rich people in Asia-Pacific don't declare their full wealth.
- Trading and finance have been Singapore's sources of prosperity for 150+ years.

It brings us difficult questions: how does Singapore be relevant to them (even when more of us are better in English than Chinese or Bahasa)? One way is encourage them to buy apartments or deposit in banks, but that drives up property prices and hurts savers. Another way is to grow tourism with car races & integrated resorts, but that causes traffic jams & social problems.

[Musicwhiz]

This is newsworthy for at least a few reasons:

- It's a data point in whether or not you think govt's economic policies are successful. The fact that the upper middle class is benefiting together with classes that are benefiting less.
- The fact that there're more rich people in Asia-Pacific than the Europe, even though GDP & GDP per capita in Europe are much higher, and that lots of rich people in Asia-Pacific don't declare their full wealth.
- Trading and finance have been Singapore's sources of prosperity for 150+ years.

It brings us difficult questions: how does Singapore be relevant to them (even when more of us are better in English than Chinese or Bahasa)? One way is encourage them to buy apartments or deposit in banks, but that drives up property prices and hurts savers. Another way is to grow tourism with car races & integrated resorts, but that causes traffic jams & social problems.

So, following up on your observations, my comments are:-

1) So is the Govt really doing a good job? Showcasing how many more millionaires there are on this little red dot seems rather pointless when the Gini Coefficient keeps getting wider. The middle income (in my opinion) still struggles to break free from the classic "middle-class prison" while the rich get richer and the poor get poorer.

2) The abundance of wealth over in Asia can be traced to China's boom (and to a lesser extent, India as well), and is also a direct result of USA and Europe's troubles which have seen Governments there scrambling to print more money or adopt tougher austerity measures.

3) I don't think it's only trading and finance. Yes entrepot trade was what made Singapore prosperous due to our unique location serving East and West back in the 19th Century, but right now we are big on pharmaceuticals, electronics and manufacturing.

I also feel that property prices will carry on increasing and bring more hardship to the common folk, while social problems have yet to fully manifest itself. Sigh, it's potentially problematic but I don't see any immediate solutions.