Desi millionaires: 83,500 and rising
The number of HNIs grew by 19.3% in 2005, the second best performance after Korea’s 21.3%.
By TNN |
MUMBAI: India’s dollar millionaires’ club is growing faster than most other economies. The number of HNIs grew by 19.3% in 05, the second best performance after Korea’s 21.3% — though Korea is growing on a lower base. The number of dollar millionaires — individuals with financial assets of Rs 4.5 crore and above — in India now stands at 83,500 as compared to 70,000 in ‘04, according to the World Wealth Report from Capgemini and Merrill Lynch.
| • No. of millionaires in India up by 19.3%, second only to S Korea • India had 83,500 millionaires in ’05, up from 70,000 in ’04 • US has maximum millionaires— 2.67 million • 1 in every 100 Americans is a millionaire, compared to 1 in 13,000 Indians |
While high networth individuals (HNIs) are on the rise across the world, Asia-Pacific is the only region where they generated a larger amount of cash through investing. The rational behind a faster growth in wealth creation was a faster growth in real GDP and market capitalisation in the Asia-Pacific region.
The report states that over the previous decade, financial wealth among HNIs had grown from $16.6 trillion to $33.3 trillion. Currently, the number of HNIs across the world is nearly 9m, compared to 4.5m in 1996, growing at 8% CAGR (see table). These financial gains were particularly strong in Latin America, Eastern Europe, Asia-Pacific, Africa and the Middle East, where emerging markets continue to play a moderate game of “catch up” with major markets.
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The number of ultra HNIs too is on the rise. Ultra HNIs are defined as individuals with financial assets of $30m plus (Rs 135 crore plus). The total number of these ultra HNWIs now stands at 85,400, a 10.2% increase in ‘05, compared to an 8.9% increase in ‘04. According to the report, these gains show that while market returns and economic indicators signaled that a deceleration was under way in many regions of the world, HNIs were still able to find select pockets of high performance in ‘05.
The rise in millionaires has given a fillip to the private banking business in India. Currently, only a handful of entities cater to the high-end of private banking in India. These are ABN Amro, BNP Paribas, Deutsche Bank, DSP Merrill Lynch, SocGen. Others like UBS, Credit Suisse are also looking at launching their private banking in India.
ABN Amro Bank executive vice-president and head of private clients (Asia), Barend Janssens, said, “We foresee an expansion in the need for wealth management services in India due to deregulation of markets and our target base in India includes diamond merchants, large corporates and small and medium enterprises.”
One area where HNIs found significant opportunity was in the Asia-Pacific region, where the twin drivers of market capitalisation and GDP continued to deliver high rates of growth.
Latin America and the Middle East also exhibited strong growth, which benefited HNIs investing domestically and from other parts of the world. Alert to cooling real estate and capital markets, HNIs continued to reassess their market opportunities and investment strategies. Generally speaking, HNIs remained guarded with respect to real estate and mature markets, however, their portfolio balancing act varied from region to region.
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