Number of millionaires in these countries growing faster than global average: Report
Reliance Industries chairman Mukesh Ambani, seen here holding a jar containing the first bottle of crude oil from his venture in Andhra Pradesh, is said to be the richest Indian and the world's fifth richest individual. Many in the country wish to follow in his footsteps, and a new study shows that India is minting new millionaires at a faster pace than anywhere else in the world. -- PHOTO: REUTERS
HONG KONG: India and China are minting new millionaires at a faster pace than anywhere else in the world, a study has shown.
The figures, released late on Thursday, assessed the wealth of so-called 'high net worth individuals' (HNWIs) - people with more than US$1 million (S$1.4 million) in net assets, excluding primary residences.
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Growth of those with more than US$1 million in net assets last year:
'In 2007, the standout markets in the Asia-Pacific region were China and India, with the number of wealthy individuals, and their overall level of wealth, growing at a faster rate than the global averages,' according to the 2008 Asia-Pacific Wealth Report released by Merrill Lynch and information technology services and business consultancy Capgemini.
The number of high net worth Indians rose by 22.7 per cent last year, the report said.
'Despite dislocations in developed markets, the number of high net worth individuals in India grew at a faster rate than the global average,' said Mr Pradeep Dokania, head of Global Wealth Management for DSP Merrill Lynch.
'Domestic demand and Asia's appetite for commodities continue to drive wealth accumulation in India,' he added.
China was second in the millionaire stakes. It had a millionaire population growth of 20.3 per cent in the same period, followed by South Korea with 18.9 per cent.
Across the Asia-Pacific, the number of people with more than US$30 million in personal wealth jumped by 16.4 per cent to 20,400.
Almost 30 per cent were in China, and another 5.3 per cent were in India - just behind Australia at 6 per cent.
HNWIs in the Asia-Pacific region are expected to accumulate more wealth than their European counterparts by 2012, the report said.
The region's 2.8 million HNWIs currently account for nearly a third of the world's millionaire population.
'Asia-Pacific is the engine of wealth creation,' said Mr Wayne Li, senior manager at Capgemini Financial Services, acknowledging the power shift that may occur.
Still, India's millionaire wealth trails behind that of China and Japan, the report showed, despite Indian tycoons like Mr Mukesh Ambani and his brother Anil, who feature regularly on Forbes magazine's billionaire list.
India's millionaires have a combined wealth of US$440 billion, compared with US$2.12 trillion in China and US$3.8 trillion in Japan.
China and Japan account for 62.4 per cent of Asia's millionaire wealth, while India's share is just 4.6 per cent.
But the report added: 'Although the number of emerging HNWIs in China and India is still relatively small, we expect that within 10 years, it will surpass the mature markets.'
Asia-Pacific's HNWI wealth is forecast to reach US$13.9 trillion by 2012, growing at an annual rate of 7.9 per cent.
India's economy grew by 9 per cent in the financial year ended March 2008, while China's economy expanded by 11.9 per cent last year, well ahead of other industrialised countries that are feeling the effects of the global market turmoil.
Growth is expected to slow this year in both countries, albeit still at strong rates.
India's stock markets grew by 47.1 per cent last year, but the benchmark Sensex is down more than 33 per cent this year. China, meanwhile, has seen growth slow to 10.1 per cent in the second quarter of this year.
Japan's millionaires have mostly inherited wealth, making them far more risk-averse than the rich in emerging economies like China and Vietnam, who tend to be first-generation wealthy and far more willing to take chances with their money, Capgemini said.
As the impact of the US economic slowdown resounds across Asia, most of today's millionaires are likely to turn from equities towards fixed-income securities that offer less volatile returns, the report said in its outlook for next year.
Merrill Lynch, in conjunction with Capgemini, has produced the World Wealth Report for 12 years, and the Asia-Pacific Wealth Report for three years.
But the US investment bank last week sold itself to Bank of America in an effort to survive turbulent financial markets. Mr Li said he was unable to comment on the future of the report.
