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Singapore Overtakes Hong Kong as Home to Asia’s Rich Individuals

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by Ernie B. Calucag

Singapore is now home to Asia’s rich individuals, overtaking Hong Kong as declining stock markets hit the former British territory a lot harder than its Southeast Asian rival, according to Capgemini-Royal Bank of Canada (RBC) World Wealth Report.

For the first time since 2009, Singapore has bigger number of high net worth individuals (HNWIs) than Hong Kong, added the report.

HNWIs are defined as those with more than US$1.0 million worth of investable assets.

According to the report, Singapore has 91,200 high net worth individuals in 2011, compared to 83,600 for Hong Kong.

However, both areas saw a dip in their wealthy populations. Singapore posted an 8-per cent drop while Hong Kong registered a huge 17-per cent decline in their numbers of HNWIs.

The RBC noted that this is in part due to the market volatility last year, which wiped out billions from the stock markets.

In 2011, the Hong Kong stock market slumped 16.7 per cent, resulting to more people dropping from a list of HNWIs since a large proportion of their wealth was locked in equity.

Southeast Asia, meanwhile, showed stronger signs of resilience to global turbulence than the rest of Asia as buoyant domestic spending offsets struggling exports.

Despite this, the Asia Pacific remains the region with the most HNWIs, overtaking North America for the first time. Asia Pacific had surpassed Europe back in 2010.

China remains the country with the most HNWIs in Asia Pacific, with a population of 562,000 such individuals.

The top five countries by population of high net worth individuals are the US (3.07 million), Japan (1.82 million), Germany (951,000), China and the UK (441,000).

RBC said the high concentration of HNWIS in Asia is the reason why the region is the preferred choice for wealth managers, who will also have to contend with competition from domestic banks.

Industry estimates placed the current HNWIs’ asset values at US$312.0 billion. And this is expected to double to US$616.0 billion by 2015.

“The wealth bands which are below US$5.0 million are moving into what is the preferred or priority services of banks which have a sizeable consumer network. It’s concentrated on the high end of consumer services, instead of the low end of wealth management,” said Barend Janssens, head of emerging markets at RBC Wealth Management.