Weak economies darken mood at Club Millionaire
WEAKENING economies that roiled the markets last year also took their toll on the world's rich, with Asia for the first time having more millionaires than North America, according to a study released yesterday.
A new report said the personal wealth of people with $1-million or more to invest fell last year for the second time in four years, reflecting the eurozone crisis and economic sluggishness in developed markets.
Emerging markets also felt pain: the number of millionaires in India and Hong Kong fell by almost 20%.
With Europe's debt crisis at full throttle, the outlook for wealth creation this year is dim, according to Capgemini and RBC Wealth Management's latest wealth report.
The world's population of millionaires grew by 0.8% to a record 11million, according to the report, but their collective wealth fell by 1.7% to $42-trillion.
Every region except the Middle East had a decline in wealth. It was the first global drop in millionaire wealth since the 2008 financial crisis, when the ranks of the wealthy shrank by 15% and their wealth by 20%.
Families with $30-million or more to invest saw their combined wealth fall by 4.9% and their ranks shrink by 2.5% to 100000 people. This decrease reflects their holdings in higher-risk and less liquid investments such as hedge funds, private equity and real estate.
Sinking stocks, slowing exports and slumping currencies hit some countries especially hard.
The number of Indian millionaires fall by 27500, or 18%, to 125500 last year, reflecting a one-third decline in stock market values. Hong Kong's millionaire population fell by 17.4% as eurozone woes weighed on its growth.
Last year for the first time since 2008 - when their ranks were depleted by 32% by falling stock prices and lower global demand for goods and services - the number of wealthy Indians fell, according to Capgemini.
The Toronto banking giant, one of the world's 10 biggest wealth managers, took over sponsorship of the widely watched report last month from Bank of America's US brokerage unit, Merrill Lynch.
George Lewis, global head of wealth management at Royal Bank of Canada, noted that the number of high net worth individuals had risen even as their total wealth decreased.
"It suggests that there continues to be upward mobility and the ability to generate wealth around the world," he said.