Hong Kong’s dollar millionaires swell at the slowest pace since 2014, due to trade war-induced bear market

The ranks of Hong Kong’s US dollar-denominated millionaires grew at their slowest pace since 2014, as the US-China trade war weighed on financial markets and depressed stock values all over Asia, according to a report by Citibank.

The number of Hong Kong residents with at least HK$10 million (US$1.27 million) in liquid assets – bank deposits, mutual funds, stocks and bonds – rose 1.5 per cent to 69,000, based on Citibank’s telephone survey and interviews with 4,192 respondents.

Those with the same amount in total assets, including property holdings, grew 3 per cent to a record 511,000. In a city of 7.48 million residents, that would be about 7 per cent of the population.

Hong Kong had one of Asia’s worst-performing stock markets last year, with the benchmark Hang Seng Index dropping by almost 14 per cent, in its worst annual return in seven years. Only 12 of the 50 stocks in the index recorded positive returns last year as worries about escalating trade tensions with the US, China’s economic slowdown and fears about the path of interest rates weighed on share prices.

The city’s home prices also fell 9.2 per cent between August and December after a buoyant first half last year, cutting into the personal wealth of many Hongkongers. Each millionaire owned 3.2 properties on average in the survey, more than half of which are being held as investments. Prices have since rallied and were up 1.6 per cent in the first two months of 2019.

Property was the main holding for most millionaires in Hong Kong, accounting for 73 per cent of their assets in 2018, according to Citibank, which has been conducting the survey since 2010. That was little changed compared with 72 per cent in 2017.