Millionaires becoming a yuan a dozen on sizzling mainland
The ranks of mainland US-dollar millionaires grew 7.8 per cent to 345,000 last year as more people benefited from double-digit economic growth and soaring stock markets.
A report by Merrill Lynch and Capgemini said a flurry of initial public offerings by mainland companies helped create the new millionaires. Hong Kong saw a 12.2 per cent increase in the number to 86,618 - the 10th fastest growth in the world.
Developing countries with booming economies saw the fastest growth in millionaires last year, with the world's wealthiest seeing their investment portfolios grow by 11.4 per cent to US$37.2 trillion, according to the report. The number of millionaires worldwide rose by 8.3 per cent to 9.5 million.
'Strong economic growth and a robust performance in many of the region's stock markets worked together during 2006 to drive wealth creation in the Asia Pacific,' said Victor Tan, head of Merrill Lynch's private banking business in China.
Regions where the number of rich people were growing fastest were Africa, the Middle East and Latin America.
The number of Asia-Pacific people with at least US$1 million in assets, not including their homes, rose 8.6 per cent to 2.6 million in 2006, and their collective wealth rose 10.5 per cent to US$8.4 trillion.
Five of the 10 areas where the numbers of millionaires were growing fastest were in Asia, led by Singapore with a 21.2 per cent increase and India with growth of 20.5 per cent.
The report said the number of rich people in Asia-Pacific should continue to grow this year, although at a slower rate, with China and India fuelling most of the new wealth.
'As consumption moderates in the United States, a market on which China is very dependent, Asian growth should be a bit slower than in the past,' the report said.
The world's wealthy shifted money out of investments like hedge funds and into property last year. This trend was most dramatic in Asia-Pacific, where 29 per cent of the money of the rich was invested in real estate, up from 16 per cent in 2005. Direct commercial real estate investment in Asia-Pacific was US$94 billion in 2006, up 42 per cent from 2005.
The report predicted people would bring their money back to alternative investments, although interest in real estate trusts was predicted to remain strong.