The number of millionaires living in the Asia-Pacific region has increased by 8.6 per cent in the last year with the population now standing at 2.6 million, a report has found.
According to the Capgemini/Merrill Lynch Asia-Pacific Wealth report, the Asia-Pacific accounts for 27.1 per cent of the global high-net-wealth individuals (HNWI) population.
The wealth of Asia-Pacific HNWI totalled US$8.4 trillion in 2006, an increase of 10.5 per cent over 2005.
HNWI wealth was concentrated in Japan and China, which accounted for 43.7 per cent and 20.6 per cent, respectively of the region’s total wealth, the report said.
“Although the vast majority of Asia-Pacific’s HNWI hold between US$1million and US$5 million in net financial assets, we are seeing a sharp rise in the number of Ultra-HNWIs – people with more than US$30 million in assets,” Capgemini Australia vice president wealth management Gregory Smith said.
“This is particularly evident in China, where that country’s phenomenal economic growth is reflected in a high concentration of UHNWIs. According to our findings, more than 28 per cent of the 17,500 UHNWIs in the region are in China.”
The report found the key drivers of wealth in the Asia-Pacific in 2006 were strong growth in real gross domestic product and stock market capitalisations.
China and India drove the region with 10.5 per cent and 8.8 per cent real Gross Domestic Product growth respectively.
In terms of investment allocation, the report found Australian HNWIs allocated 37 per cent of their assets to equities, the highest level in the region.
Investors in China and Indonesia also had relatively high equity allocations. Investors in South Korea, on the other hand, allocated the largest percentage of their portfolios to real estate.
“There is a high level of sophistication of wealth management offerings from which Australian HNWIs benefit. Just look at some of the solutions around commodities that investors are able to access in this market,” Merrill Lynch Global Wealth Management first vice president investments Peter Opie said.
The primary sources of wealth for China and Australia are business and stock options, whereas inheritance and income are the main wealth sources for Japan’s HNWIs.
The second annual Capgemini/Merrill Lynch Asia-Pacific Wealth report was released yesterday.
