Home To 67,000 Millionaires

Source : TODAY, Friday, October 19, 2007

And typical S'porean is better off than peers in Asia Pacific: Report



















NOT only is the average Singaporean better off than his or her counterparts in the Asia-Pacific economies, the typical millionaire here is also wealthier than his or her peers in the region.

Last year, the average assets of a high-net-worth individual (HNWI) in Singapore was US$4.9 million ($7.2 million), higher than the regional average of US$3.3 million, said a wealth manager at a media briefing for the 2007 Asia-Pacific Wealth Report released yesterday by Merrill Lynch and Capgemini.

HNWIs are people who have more than US$1million in assets, excluding their primary residence.

These individuals in Singapore constitute 2.6 per cent of the Asia-Pacific HNWI population, but contribute almost 4 per cent, or US$320 billion, to the region's HNWI wealth.

Singapore is home to the fastest-growing millionaires club in the region, as the number of HNWIs rose 21.2 per cent to about 67,000 last year.

These millionaires are also getting richer. The average worth of their assets was US$4.7 million in 2005 — US$200,000 less than last year.

According to the report, the wealth of these HNWIs, comprising Singaporeans and permanent residents, mostly derives from business investments and inheritance.

But they also "built their wealth from investing in real estate and equities, cashing in the property boom of high-end units," said Mr Kong Eng Huat, market managing director at Merrill Lynch.

They grew their wealth by investing 36 per cent of their financial assets in real estate and 26 per cent in equities, the report said.

"The sophisticated investors were the early movers and they were beginning to allocate their assets into real estate even before it went up in a big way," said Mr Kong.

"These people reduced their asset allocation in alternative investment instruments like hedge funds because in the last two years, the real estate and equities market were outperforming the hedge funds."

The HNWIs in Singapore also tended to favour cash instead of fixed income, according to the report.

Among the fabulously wealthy, there are 928 individuals here worth more than US$30 million each.

Known as ultra HNWIs, they make up 1.39 per cent of the HNWIs in Singapore, above the global average of 1 per cent. Said Mr Kong: "More banks are beginning to organise teams to penetrate this market segment."

Strong economic growth coupled with high savings and strong returns from equities boosted wealth across the Asia-Pacific region. The number of HNWIs in the region rose 8.6 per cent to 2.58 million last year.

This growth is likely to be sustained despite recent volatility in the markets.

Swiss bank UBS told Today that liquid assets held by wealthy individuals in the region excluding Japan were predicted to grow by 9.7 per cent annually until 2009, compared to less than 6 per cent globally over the same period.