Saturday, June 12, 2010

S'pore millionaire club the fastest growing

11% of households in S'pore have investable assets of over US$1m

SINGAPORE added millionaires at a faster rate than anywhere else in the world last year, despite a recession that decimated wealth in many nations.

The millionaire club grew by 35 per cent here, putting Singapore just ahead of second-placed Malaysia, with a 33 per cent gain, and Slovakia on 32 per cent and China on 31 per cent.

In absolute numbers, the United States still has by far the most millionaire households at 4.7 million, followed by Japan and China. But you are more likely to bump into a millionaire here.

An annual study by Boston Consulting Group (BCG) showed that Singapore had the highest concentration of millionaires, as in 2008. A total of 11.4 per cent of households here own more than US$1 million (S$1.4 million) - defined as those with investable assets of over US$1 million, exclusive of property and items like art. BCG did not provide the number of millionaire households in Singapore.

Hong Kong was next in terms of concentration, followed by Switzerland, Kuwait, Qatar, the United Arab Emirates and the US.

Singaporean T.J. Thang, who belongs to the elite group, did not fare too badly during the downturn. 'Some of my stocks fell in value during the recession, but I was still getting attractive property rental yields, and hence my cash grew,' said the 49-year-old businessman.

Economists and wealth managers cite a number of factors as to why Singapore is leading the way in the growth of millionaire households. One is the increasing number of property owners reaping profits from en bloc sales.

'I had a few friends who benefited from the en-bloc windfall and they parked their money in stocks and bonds,' said Mr Richard Wee, chief executive of private bank Lombard Odier Darier Hentsch & Cie (Singapore).

People here are also more likely to capitalise on their familiarity with the region by investing in shares in fast-growing Asia. The MSCI index of Asia-Pacific stocks traded outside Japan rose nearly 70per cent last year - its best performance since 1993 - far outpacing expected gains of just over 20per cent in US and European stocks.

Then there is Singapore's 'liberal admissions policy' to attract talent and the well-heeled, said CIMB Research economist Song Seng Wun.

Today, virtually every big-name private bank which caters to the well-heeled has made Singapore its regional hub.

What this latest report means is, 'for all the private bankers who are here, it confirms that this is the right spot to be', said Mr Rolf Gerber, chief executive of LGT Bank in Liechtenstein (Singapore).

BCG told The Straits Times yesterday: 'Part of the reason for high wealth is that Singapore has a much higher savings rate than a lot of countries with higher average incomes.

'In terms of the 'average Singaporean', the majority of households in Singapore (about 60 per cent) have bankable assets worth between US$250,000 and US$1 million, with more at the lower end of the range than the higher end.'

Another factor could have been the strength of the Singapore currency against the US dollar.

The sharp rise is also likely taking place from a low base. A Merrill Lynch Cap Gemini report last year reported that the number of millionaires in Singapore had fallen 21 per cent to 61,000 in 2008 due to the financial crisis.

Separately, the latest figures from Singapore's taxman show that there were 3,838 taxpayers who earned more than $1 million in 2007.

BCG's study reviewed the assets under management covering 62 markets representing around 99 per cent of global economic output.

Top of the list
Country growth in millionaire households
Singapore: 35%
Malaysia: 33%
Slovakia: 32%
China: 31%
Morocco: 28%
South Korea: 28%
United Arab Emirates: 23%
Germany: 23%
Indonesia: 21%
Algeria: 21%

Source: Straits Times, 12 Jun 2010

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