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Jake Van Der Kamp

'S'pore ousting HK as top millionaire hub'
Singapore is expected to pull ahead of Hong Kong as home to the highest concentration of millionaires over the next decade, sealing its reputation as a wealth centre not just in Asia but worldwide.'
Pravda, May 7
No, this excerpt does not come from the Soviet era Russian broadsheet of that name. Pravda in Russian means truth and this reference was actually to the Party Rendition and Authorised Version of Daily Announcements, which is what passes for an English language daily newspaper in Singapore.
When not absorbed with the pronouncements of the Royal Family, Pravda likes to pass on such thrilling news items as that Singapore has just been named the world's No4 producer of brass-coated broom handles or No3 producer of coat-handled brass brooms, or whatever it may be, let us all rejoice.
And nothing delights this illustrious journal quite like demonstrating to Hong Kong  which city is really top dog in this part of the world, particularly when it comes to measures of financial standing. Brass coats and handle brooms somehow never rate quite as high in the prestige stakes.
Thus you can imagine that the editors of Pravda were interested when the asset management side of Barclays Bank teamed up with the Economist Intelligence Unit to do a study on where rich people live (Answer: Exactly where you expect them to) and where they might live in  10 years (Answer: Again pretty much where you would expect).
But now envision the thrill of delight in Pravda's editorial offices when someone discovered in the forecasts of this study that in 2017 Singapore would have the highest percentage in the world of households with net wealth in excess of US$1 million - 40.7 per cent.
And conceive, if you can, of their absolute ecstasy in realising how this means that Singapore would supplant Hong Kong, which was at the top of the league table in 2007 -  O frabjous day! Callooh! Callay! - Clear the presses, we got us a scoop.
Now I don't think we would ordinarily need trouble ourselves all that much with the conceits and jealousies that Singaporean bureaucrats find so diverting were it not that a sizeable proportion of our own bureaucrats apparently see things that they wish to emulate in Singapore.
What it is that they see I am not quite sure. If it is truly the objective of government to enslave its own population then Beijing at least offers a more honest model for doing so. Nonetheless, it is fact that our bureaucrats constantly refer to how things are done in Singapore when considering any initiative of their own.
In the event, then, that they may attach any importance to the findings of this EIU/Barclays study, I think it worthwhile to point out a few salient facts about these findings.
First of all, they define millionaire as US dollar millionaire, which immediately means that someone must have made a forecast of US dollar exchange rates in 2017. I shall accept an exchange rate of HK$7.80 for the Hong Kong dollar but what is it for the Singapore dollar?
Note here that the study said an exact 40.7 per cent of Singapore households will achieve this status in 2017. This precision implies an equally precise exchange rate forecast. Could we have it, please? Of more importance, however, is the fact that the study's forecast of household net wealth includes the value of the household's principal residence. Most such studies exclude this. It is your disposable wealth that counts and you can't really dispose of a place to live.
But EIU/Barclays decided to include it. Very well, but this means that the key forecast for every country covered is the state of its property market in 2017. For Singapore and Hong Kong in particular, property ownership accounts for the bulk of household financial assets.
Thus, could I please have the study's assumptions for the market value in 2017 of a standard HDB flat in Ang Mo Kio and a standard HOS flat in Sha Tin?
And for Singapore could I also have the underlying forecast for the investment performance of the Central Provident Fund over the next 10 years. The CPF total amount due members stands at the moment at about 56 per cent of gross domestic product. We have a very significant variable here for household wealth.
Let me sum it up. It's all nonsense, both Pravda's whoop-la and the study itself. The point was to help Barclay's investment salesmen sell their services and let's just hope for their clients' sake that their advice is more solidly based.



Mouthpiece media swallows wealth study spin whole