The rich just got richer - up by 21% on last year

PUBLISHED : Friday, 07 January, 2011, 12:00am
UPDATED : Friday, 07 January, 2011, 12:00am

The gap between rich and poor may be widening as inflation wipes out the modest pay rises achieved by workers, but the city's wealthiest tycoons have no such worries - they all got richer last year.

According to Forbes Asia's 2011 rich list, Hong Kong's 40 wealthiest tycoons have a collective net worth of US$163 billion, a fifth more than the US$135 billion last year.

Unlike the city's wage-earners, whose real wages fell after adjusting for inflation, the increase for the top 40 is well ahead of the inflation rate, which was 2.9 per cent in November.

'Superman' Li Ka-shing, 82, continues to top the list with a fortune estimated at US$24 billion, compared with US$21.3 billion last year.

The Kwoks controlling Sun Hung Kai Properties are at No 2.

Lee Shau-kee, chairman of Henderson Land Development, ranks third.

Government statistics for September show that while nominal wages increased 2.4 per cent from a year earlier, after adjustment for inflation there was actually a decrease of 0.8 per cent.

'The wealth of tycoons is very much linked to the property and stock markets,' Dr Mo Pak-hung, associate professor at Baptist University's department of economics, said. 'They manage to make a comeback in the face of economic revival ... but not those with no money to buy assets or properties.'

According to Forbes' latest report, all 40 individuals or parties have fortunes worth more than US$1 billion. Six tycoons on last year's list did not have that much in their coffers.

More than a third make their money from real estate, but not the four newcomers to the list. William Connor II, 22, runs a sourcing logistics firm. Choy Kam-lok, 27, heads United Laboratories International, which makes antibiotics. Entertainment mogul Albert Yeung Sau-shing enters the list at No 31. Simon and Eleanor Kwok, the couple behind Sa Sa International, are at No 34.

Those who have dropped from the list include Sunwah Group chairman Jonathan Choi Koon-shum, Hopewell chairman Gordon Wu Ying-sheung and founder of printed-circuit-board maker Meadville, Tan Hsiang Chien.

Although the tycoons have regained some of their wealth, they have yet to make it back to the pre-financial crisis level: their collective wealth in the beginning of 2008 was US$178 billion, 8 per cent higher than in 2011.

Mo said the rebound of the rich was in line with the revival in the stock market.

Net-worth wealth of the billionaires is calculated based on stock prices on a particular day.

The Hang Seng Index, on dates set by Forbes, closed at 20,726 and 22,714 respectively. It represented a 9.6 per cent increase from 2010 to 2011.

Mo said while the rich could invest in stocks and properties to guard against inflation, people who could not afford to do so were hit hard.

As long as the Hong Kong dollar is pegged to the US dollar, inflation will stay a problem as imported goods from the mainland and elsewhere become more costly.

On top of that, the wages of most residents cannot catch up with the rising prices. 'As the economy has only started to recover, companies are still unwilling to hire people at higher salaries.'

Surging property prices, the bane of those looking for homes, also made developers richer. The average flat price rose by one-third in a year, while those of luxury flats doubled, according to Fulbright Securities general manager Francis Lun Sheung-nim.

'A one-fifth rise in [the tycoons'] wealth sounds lower than I would expect. Forbes could have underestimated it,' Lun said.

News of a property stamp duty did not calm the booming market, and the government should tighten its grip further, he added.

Ho Hei-wah, director of the Society for Community Organisation, said tycoons should share the harvest.

'A minimum wage is not enough. They should pay their workers more than that,' he said.

Income illusion

September figures show that while wages rose 2.4 per cent from a year earlier, with inflation salaries were down: 0.8%