Millionaires' row grows 18pc but slowdown forecast

PUBLISHED : Saturday, 11 June, 2005, 12:00am
UPDATED : Saturday, 11 June, 2005, 12:00am
 

The number of high net-worth individuals in Hong Kong grew 18.8 per cent to 67,500 last year from 2003.


The data came from a report by Merrill Lynch and the Capgemini Group on world wealth.


But Merrill Lynch analysts warn Hong Kong's wealth creation is likely to slow this year.


High net-worth individuals are defined as having at least US$1 million of financial assets, excluding their primary homes.


'Hong Kong enjoyed its second year of robust economic growth, and both the property and stock markets continued to rebound. Over the past two years, Hong Kong has seen an almost 50 per cent increase in the number of wealthy people,' said Tan Cheong Soon, Merrill Lynch Global Private Client managing director for greater China.


But the rise in the number of wealthy individuals would slow this year because of weaker gross domestic product growth and an expected downturn in the residential property market, Merrill Lynch analyst Stephen Corry warned.


Merrill Lynch expects Hong Kong's GDP growth to slow to 5.3 per cent this year from 8.1 per cent last year, and residential property prices to fall 25 per cent in the next 18 months as higher interest rates chase off speculators. It has a mixed/neutral outlook for Hong Kong's stock market this year.


On the mainland, the growth in the number of high net-worth individuals slowed from 21.8 per cent in 2003 to 4.3 per cent last year, reaching 299,500. The slowdown in China's wealth creation was partly due to the soft mainland stock markets, the report said.


Singapore's population of US dollar millionaires saw faster growth than Hong Kong's - rising 22.4 per cent to reach 48,500 last year. The growth was partly due to economic migration of rich people from surrounding countries such as Indonesia.


The number of rich individuals in India grew 14.6 per cent to 70,000, while the number in Australia grew 14.8 per cent to 134,000.


Japan was the Asia-Pacific region's richest economy but a stagnant one, with its high net-worth population inching up 2.4 per cent to 1.33 million last year.


The regions with the fastest growth in millionaires was North America, up 9.7 per cent, and the Middle East, up 9.5 per cent.


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