As in most parts of the world, the rich are getting richer in Southeast Asia. This is what has been found out through the newest report from private wealth intelligence firm called Wealth-X and the Swiss-based bank UBS. Despite the shrinking net worth of individuals in emerging markets like China and Brazil, the wealth profile in Southeast Asian countries continues to grow.
The said report tracked every country in the region, namely, Singapore, Thailand, Malaysia, Indonesia, Vietnam and the Philippines and their respective ultra-high net worth individuals or (UHNW). To qualify as UHNW individuals, an asset of US$30 million and up should grow over the past year.
Thailand showed the most remarkable performance in terms of biggest growth of this specific group of wealthy individuals, with its UHNW population increasing by 15.2% or 720 individuals this year (2013). In 2012, the UHNW individuals only run at 625 people. The Thai millionaires list has also grown and Thailand now controls US$ 110 billion in assets, up from U$95 billion in 2012.
Vietnam and Indonesia also showed notable improvement in their pool of wealthy individuals, growing by 14.7% for Vietnam and 10.2% for Indonesia. There are 865 UNHWs controlling US$130 billion, worth of assets. This is a jump from the previous year’s 785 individuals with a total wealth of US$120 billion from the year before. And despite China’s slowdown which led to a reduced demand for Indonesian commodities and a slower GDP growth in 2012 compared to 2011, the wealth pool has continued to grow and improve.
For the other countries like the Philippines and Indonesia, the continued accumulation of wealth in the region is attributed to robust domestic consumption and a growing middle class. This results in keeping the rich afloat amidst poor market performance.
On the other hand, frontier markets like Myanmar and Vietnam continue to hold promising projections for private bankers, too. In both countries a steadily increasing consumer class and thriving rich elites are observed. UBS, despite its non-presence in the two countries is watching very closely on what could come out of this development as they would be keen to servicing clients after the rule of law and rules governing the financial industry becoming more transparent.
Expectedly, the rich country Singapore saw its population of UHNW individuals climb up by a modest 3.8%. This figure only includes those whose primary business dealings and wealth are based in the city-state in contrast to those who reside there. This figure is less than half of Hong Kong’s population of these individuals. The report predicts, however that Singapore’s significance as a destination for the world’s wealthy to serve as a place to park and manage their assets will continue to grow, attributed mainly to low personal tax rates and tax exemption.
The report continued to cite Singapore as uniquely positioned to provide service to clients who have multi-generational issues. Singapore is well designed to accommodate long-term planning and for preservation of a family’s wealth for longer period of 70 to 100 years. Singapore also has one of the highest ratios of billionaires per capita in the world – 1 billionaire for every 200,000 residents. This ratio is three times higher than that of the United States which has the highest number of ultra-wealthy individuals in the world.
While the overall growth of wealth in Asia was hampered by China’s decreased number of ultra-high net worth individuals dipping at 5.1% from the previous year. In Europe and North America, rich individuals are bouncing back with the wealthy population in those two regions growing faster than Asia in the past year.
Based on the report’s prediction, what is experienced in Asia is just a temporary slowdown with the global shift of wealth to the Asian region. It is also predicted in the report that Asia’s ultra high net worth population will eclipse that of Europe in 2012, and the North America by the year 2032.