S'pore Ousting HK As Top Millionaire Hub

Source : The Business Times, May 7, 2008

China seen to be 3rd richest country by 2017: study

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.























And while the US and Japan should remain the top two largest global economies, emerging markets such as China, India, Russia and Brazil will make their presence felt more strongly.

Now ranked seventh in terms of total net worth, China will grab third place by 2017, bypassing several G7 countries to become the third-richest country, while India is expected to make its debut in the top 10 list at No 8. Russia and Brazil will also display significant growth, moving up from 19th to 11th place and 15th to 12th place respectively.

With the Economist Intelligence Unit, Barclays Wealth released a report yesterday that forecasts the evolution of the level and distribution of household wealth in 50 countries between 2007 and 2017. Household wealth was measured using three components - financial holdings such as cash and other liquid assets, non-financial holdings such as property, and an aggregate measure that combined the two.

Last year, Singapore trailed Hong Kong in highest wealth density, with 23.3 per cent of residents having wealth of more than US$1 million. But by 2017, Singapore is expected to see this figure grow to 40.7 per cent - some 436,000 households - in comparison to Hong Kong's predicted 39.4 per cent.

According to the report, countries with the highest percentage of dollar millionaires tend to be small, densely populated financial centres such as Singapore and Switzerland.

In addition, the study revealed that the disproportionate distribution of wealth is expected to narrow as the concentration of wealthy households in Singapore, with US$3 million and US$5 million, is on an upward trend. Households with wealth of US$3 million will more than double from the current 5.1 per cent to 12.5 per cent, while those with US$5 million will almost triple from 2.1 per cent to 6 per cent.

Barclays Wealth chief executive for Asia-Pacific, Didier von Daeniken, pointed to Singapore's recent efforts to shift its focus from manufacturing towards technology and financial services. In addition, the opening up of previously protected sectors, like financial services, and bilateral trade agreements serve as an impetus to garner foreign direct investment.

For China, wealth creation has stemmed largely from the stock market and real estate. Citing figures from Ernst & Young, the report said 464 IPOs were launched in China over the past three years, raising US$134 billion. As the country's economy continues to expand, the average net worth per household is expected to quadruple, from US$18,000 in 2007 to US$74,000 10 years later.

'Asia now represents 25 per cent of HNWI individual wealth globally but only about 10 per cent of the income of the major private banks,' said Mr Daeniken. 'Growth for private banks can come from two areas - more penetration of existing wealth and more wealth being created.'

In Asia, Barclays clients are typically entrepreneurs, a trend that is expected to remain in the future.