The number of affluent people in the Asia-Pacific region rose nearly 10 per cent last year as the rising price of homes and share portfolios helped spur on wealth, according to an annual report by Merrill Lynch Global Wealth Management and Capgemini.
“Asia-Pacific remains a region of enormous wealth creation, spearheaded by China, India and Japan, which continues to outpace global levels,” Merrill Lynch Global Wealth Management head of Asia-Pacific wealth management Michael Benz said.
“The increasing sophistication and demands of Asia-Pacific HNWIs (high net worth individuals) mean that those wealth management firms that can leverage across their businesses are best placed to better serve their clients’ needs.”
The number of HNWIs in the Asia-Pacific region rose to 3.3 million in 2010, placing the region ahead of Europe for the first time and making it the second biggest centre of affluence after the United States.
In terms of wealth, the Asia-Pacific region overtook Europe in 2009 and held its position in 2010, the report showed. The region’s wealth grew 12 per cent to US$10.8 trillion in 2010, topping Europe’s US$10.2 trillion.
The region’s wealthy investors put their money largely into shares and property, with 26 per cent of their investments in equities and 27 per cent in real estate.
“Looking forward, Asia-Pacific HNWIs are likely to increase their exposure to equities and fixed-income holdings, while cutting the amount held in cash/deposits by 2012,” the report said.
“They are also expected to reduce their relative holdings of real estate to 20 per cent next year amid concerns that property prices in many Asia-Pacific markets are due for a major correction after the past few years’ gains.”
The report defines HNWIs as people who have US$1 million or more worth of investable assets, a category which excludes the family home, collectibles and cars.
Ultra-HNWIs (UHNWI), those with at least US$30 million in investable assets, also grew in the region in terms of population and wealth.
The number of UHNWIs swelled 15 per cent to 23,000 and their pool of wealth jumped 16.8 per cent, beating increases of 10.2 per cent and 11.5 per cent in the global UHNWI population and wealth, respectively.
The region’s HNWI community remained concentrated, with Japan, China and Australia making up the lion’s share. The three countries accounted for 74.4 per cent of the Asia-Pacific HNWI population and 68.2 per cent of wealth in 2010. Japan and China together were home to 68.6 per cent of HNWIs in the region and 62.8 per cent of regional HNWI wealth, down from 70.4 per cent and 64.7 per cent a year before.
Japan remained the single largest HNWI market in the region. It accounted for 52.5 per cent of the Asia-Pacific HNWI population and 38.2 per cent of its wealth at the end of 2010. China remained the region’s second largest HNWI, the fourth largest in the world, with 535,000 HNWIs, up 12 per cent from 2009.
Australia became the world’s ninth biggest HNWI population, up from tenth a year earlier.
