http://www.straitstimes.com/Money/St...ry_675226.html

Jun 2, 2011

As thick as... millionaires in S'pore

Concentration of such households here is the highest in the world

By Gabriel Chen, Finance Correspondent


SINGAPORE has once again emerged as the country with the highest concentration of millionaires in the world.

A total of 15.5 per cent of households here hold more than US$1 million (S$1.23 million) - defined as those with investable assets of over US$1 million, exclusive of owner-occupied property and items like art. Last year, the proportion was 11.4 per cent.

Millionaires here are much thicker on the ground here than in second-placed Switzerland, where 9.9 per cent belongs to the club. Qatar was in the No. 3 spot with 8.9 per cent followed by Hong Kong with 8.7 per cent, said a new report by the Boston Consulting Group (BCG).

In terms of absolute numbers, the number of millionaire households here grew by almost 33 per cent to 170,000 last year, after jumping 35 per cent a year earlier, placing Singapore ahead of China (31 per cent), Indonesia (26 per cent) and Thailand (25 per cent).

Only Australia minted millionaire households at a faster rate - 36 per cent.

The United States had the most millionaire households at 5.2 million, followed by Japan, China, Britain, and Germany.

Economists and wealth managers cite a number of factors as to why Singapore is experiencing enormous growth in the number of millionaire households.

'Singaporeans saw their wealth surge because of the stronger Singapore dollar, sharp economic rebound and soaring asset prices, including property,' said Bank of America Merrill Lynch economist Chua Hak Bin. 'Openness to foreign talent and wealthy 'new' Singaporeans probably also expanded the number of millionaires.'

UBS Wealth Management Research chief investment strategist Kelvin Tay said: 'The starting point for the burgeoning number of millionaire households here lies in the strong fundamentals of these households during the credit crisis.'

'As much as 70 per cent of household assets were sitting in cash. Therefore, not only did these households emerge relatively unscathed from the crisis, they were also well placed to capitalise on the opportunities in both the stock and property markets when real interest rates plunged into deeply negative territory.'

A case in point is 65-year-old Felix Ong, former chairman of electronics component firm Seksun, which sold all its assets and business undertakings for $295.1 million to Supernova (Cayman) in 2008.

Mr Ong collected a substantial eight-figure sum from the sale, but told The Straits Times his wealth increased further after the stocks, bonds and several properties which he bought during the downturn rose sharply in value.

The BCG study showed the wealthy are starting to move more money back into stocks, with 35 per cent of total assets of US$121.8 trillion now parked in equities, up from 33 per cent last year but still four percentage points lower than 2007.

The study also highlighted that about 1 per cent of households have 39 per cent of the world's wealth, pointing to increased inequalities after the crisis.

'Income inequality is widening in Singapore,' said United Overseas Bank senior economist Alvin Liew. 'A lot more higher value jobs are created here and if you are in these jobs, you'll be expecting higher wages. On the other side of the spectrum, wage levels of lower-skilled workers have not moved up as fast.'

Private bankers say BCG's findings suggest that banks here which cater to the well-heeled are in the right place given Asia's rapid wealth creation. 'While Asian wealth is generated in the recent years, Asian high-net-worth individuals are more conservative in the way they invest,' said Mr Renato de Guzman, chief executive of Bank of Singapore.

'They traditionally like to invest in deposits, equities and property. Increasingly, Asian high-net-worth investors are getting more sophisticated and are diversifying away from US dollars and more into Asian currencies such as Singapore dollars, Korean won and other emerging markets currencies such as the Chinese yuan and Indonesian rupiah.'

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