Hong Kong Sees Large Growth In HNWI Population

by Mary Swire, Tax-News.com, Hong Kong

21 June 2004

Of the 68 countries and territories reviews in the Merrill Lynch/Capgemini World Wealth Report 2004, Hong Kong recorded the biggest leap in its high-net-worth individual population.

Buoyed by the recent economic recovery and profiting from increasing levels of investment in mainland China, the combined wealth of Hong Kong’s HNWIs (people worth US$1 million or more excluding residential real estate) grew to $US437 billion in 2003, up from $US337 billion the previous year.

The findings are also in stark contrast to what happened between 2001 and 2002, when the number of HNWI in the territory shrank by 8,000 to 35,000.

There was also a significant increase in the number of new millionaires in mainland China, where the HNWI population grew from 211,000 in 2002 to 236,000 in 2003, holding a combined wealth estimated at $969 billion.

“China's wealthy are growing in numbers and in investment sophistication,” observed Chen Chiping, vice-president of Capgemini China. “Their wealth management has evolved in a more rational approach with greater emphasis on family education funds, insurance products and fixed income.”

Overall, by the end of 2003 there were an estimated 7.7 million individuals around the world with HNWI status, up around 500,000 on the previous year.

The total wealth of this group also grew by 7.7% to $28.8 trillion as wealthy individuals responded quickly to global trends affecting their ability to preserve and grow wealth.

“HNWIs were among the first investors to begin shifting their focus from low-yielding fixed-income securities back into equities, specialized products and alternative investments," noted Petrina Dolby, a vice president in Capgemini's Securities Industry Consulting Practice.

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