Wealth shifts to emerging countries
China, India and Singapore 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, according to Boston
The small city-state of Singapore counts the highest number of
millionaire households relative to its population
Millionaire households in China rose 16 percent to 1.43 million while
those in Singapore climbed 14 percent to 188,000 and India saw a 21
percent increase to 162,000, the Boston-based firm said in a report.
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 percent gain to US$122.8 trillion
compared with a 6.8 percent growth rate in 2010, Boston Consulting said.
Singapore had the highest proportion of millionaire households while
Hong Kong led the rankings for the percentage of billionaires.
"It's the first significant interruption of growth since the
financial crisis," said Peter Damisch, a partner with Boston Consulting
in Zurich. "Emerging markets will play a bigger role in private wealth."
The Stoxx Europe 600 slid 11 percent last year with industrial and
financial-services companies among the biggest decliners. Germany's Dax
Index tumbled 15 percent while the Standard and Poor's 500 Index was
Wealth in North America declined 0.9 percent to US$38 trillion, while
western Europe posted a 0.4 percent drop to US$33.5 trillion, the report
said.Global wealth surged at a compound annual rate of almost 11 percent
from 2002 to 2007 before the financial crisis and the indebtedness of
developed-market economies slowed growth, according to Boston Consulting
The firm predicts a growth rate of four percent to five percent over
the next five years, driven by wealth creation in emerging
markets.Asia-Pacific, excluding Japan, saw an 11 percent 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 percent and 19 percent a year respectively through 2016,
with affluent Chinese more than US$10 trillion better off by the end of
Wealthy individuals in Latin America saw an increase of almost 11
percent in assets last year, lifted by economic growth in Brazil and
Mexico. 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
Switzerland, which came fourth with 9.5 percent, was top of a ranking
for the proportion of households with more than US$100 million,
according to the 12th annual wealth management report, which surveyed 63
markets. Switzerland had 11 households per 100,000, followed by
Singapore with 10 and Austria with eight.
Boston Consulting omitted Saudi Arabia from its ultra-wealthy ranking
because it was too difficult to define different households within the
royal family network, Damisch said.Cross-border assets in Switzerland,
the biggest offshore centre, were unchanged at US$2.1 trillion as the
repatriation of funds by clients in neighbouring European countries was
offset by inflows from emerging market customers, the report said.
Western European offshore wealth in Swiss banks dropped 2.2 percent
while assets in Switzerland and Luxembourg originating in North America
"dwindled to an almost negligible amount", Boston Consulting
said.Worldwide, investors increased offshore assets 2.7 percent to
US$7.8 trillion with Hong Kong and Singapore among the beneficiaries.
The two biggest Asian offshore booking centres may surpass
Switzerland 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, according to
Damisch. Finding and keeping talent in these developing markets is a
"key success factor" and businesses may need to make several years of
investment before making a profit, the report said.
Bad week for billionaires
The world's richest people lost a combined US$24.4 billion ($32.3
billion) last week as concerns over Spain's rising borrowing costs and
the sputtering American job market caused global markets to
tumble.Casino mogul Sheldon Adelson lost US$2.2 billion. Shares of his
Nevada-based Las Vegas Sands fell 10.3 percent during the week.
On Friday, Macau casinos reported gambling revenue rose 7.3 percent
in May, its slowest pace since July 2009.