|
|
| • EXCH RATES |
|
Baht/$ 33.51/56
Bid/Ask
|
GOLD |
14,350
+ 350
|
|
ASIA FOCUS
Asia Pacific millionaire bracket could surpass Europe's by 2012, reports Genevieve Cua in Singapore
Asia and the world's emerging markets captured the top 10 rankings in terms of the fastest growing wealthy population in 2007, with Singapore in sixth place.
The report by Merrill Lynch and Capgemini finds that the number of Singaporean wealthy individuals - defined as those with investible assets of US$1 million or more - rose 15.3% to about 77,000. The average wealth per individual is estimated to have risen from $4 million previously to $4.9 million. This is higher than the global average wealth per high net worth individual (HNWI) of about $4.04 million.
The Asia-Pacific wealth market is projected to grow at a 7.9% annual clip over the next five years to $13.9 trillion in 2012, according to Kong Eng Huat, managing director (South Asia) of Merrill Lynch. "[The region] will surpass Europe as the second wealthiest region after North America."
Merrill and Capgemini have forecast a growth rate of 7.7% for global wealth markets to a total $59.1 trillion by 2012, taking into account recent world developments.
Recent economic downturns in the United States have been shorter, it said, thanks to increasingly effective monetary policy. Emerging markets have also outpaced analysts' expectations. High net worth portfolios have also become more diversified and mobile.
"As growth in one region or market slows, HNWIs can move freely, reallocating their funds to other areas - often more quickly than the troubled market itself can react and recover. Ultimately, this evolution will make HNWI investments less vulnerable to market downturns," said the report.
Globally, the combined wealth of the world's high net worth individuals rose 9.4% to $40.7 trillion in 2007. This is a shade paler than the growth in 2006 of 11.4%, due partly to a slower pace of world economic growth. The world's real GDP expanded 5.1% in 2007, against 5.3% in 2006.
In terms of asset allocation, the wealthy have generally reduced their exposure to real estate, and moved to cash and fixed income assets. Asia's wealthy reduced their real estate weighting from 29% to 20%. Cash and fixed income have a combined 46%.
Mr Kong said: "The wealthy have retrenched to safer assets. Domestic market allocations also gained favour, which is a tactical move of caution as investors wait for movements in the global markets."
Stephen Corry, an investment strategist with Merrill Lynch Global Wealth Management, sounded a note of caution on rising inflation. Merrill's inflation expectations have been raised 190 basis points, and yet global interest rates have fallen from 5.5% to 5.1%. Even excluding the US, the increase in average global nominal rates is just 16 basis points.
"A lot of inflation is generated in Asia. Asia is growing too quickly but central banks are slow to move rates higher. ... You don't want to be in Asian bonds; be selective on Asian equities. The best bet is Asian currencies," said Mr Corry, who favours the Singapore dollar and ringgit.
This year's report included a highlight on "passion investments" including art, luxury cars, and wellness. Globally, luxury collectibles accounted for 16.2% of passion investments, and fine art 15.9%. Among Asians, however, the preference is for jewellery and watches, which took up 19% of their "passion" dollar.
Meanwhile, private bankers are optimistic about the continued growth of the Asian wealth market despite rocky stock markets, worries over inflation and slower economic growth.
"Our expectation for general growth continues to be around 15-25%. Business activity is still quite robust although [stock] markets have consolidated. Businesses and wealth creation are our leading indicators. We still foresee a fairly healthy continuation of growth," said Akbar Shah, head of mega-wealth (Asia Pacific) for Citi Private Bank.
UBS managing director Yeong Phick Fui said the fundamentals of continuing wealth creation, particularly in China, and the increased need for professional advice would continue to drive growth. "We believe that any uncertainty in the near term will be an aberration rather than a permanent deviation from the strong underlying trend."
Raj Sriram, head of private banking for RBS Coutts Singapore, said Coutts' business grew more than 50% in 2007, and he expected "healthy" growth in the medium term.
"We have been seeing continued growth in clients' funds under management despite market volatility, although growth is at a slower pace than previous years. At the macro level, wealth creation in Asia shows no signs of slowing."
Published in Business Times (Singapore) on June 26
Prev
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
Next
