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Thread: In S'pore: 11,660 new millionaires

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    Default In S'pore: 11,660 new millionaires

    June 29, 2007

    In S'pore: 11,660 new millionaires

    By Alvin Foo


    SINGAPORE'S population of United States dollar millionaires surged by a staggering 21.2 per cent last year to 66,660 - the fastest growth rate of any nation in the world.

    The dramatic boost in the membership of this once highly exclusive club came amid a booming stock market, strong economy and the start of the property rebound last year.

    This is the second time in three years that the Republic has posted the highest growth globally in the annual World Wealth Report compiled by Merrill Lynch and research firm Capgemini.

    About 11,660 newly minted millionaires joined the ranks here last year, the survey of the well-to-do in 71 countries has found. A million greenbacks currently converts to about S$1.54 million.

    'Singapore is a little boat of 4.5 million people that floats very nicely when the global economy is doing well,' said Merrill Lynch's chief Asia strategist and senior director Mark Matthews yesterday. 'The country's growth has accelerated - not only economic growth, but also savings.'

    The 66,660 millionaires account for about 1.5 per cent of the population. This means three out of every 200 people here are millionaires.

    To qualify, these well-heeled types must have a million bucks in assets not counting that widely used barometer of wealth - the home. Other investments in real estate are included.

    Singapore was followed closely by India with 20.5 per cent growth, Indonesia (16 per cent) and Russia (15.5 per cent). Asia was home to some of the fastest-growing millionaire markets, occupying five out of the top 10 spots - a repeat of 2005.

    The number of millionaires in the region pushed their combined wealth up 10.5 per cent to US$8.4 trillion. This was largely driven by strong expansion of the China and India economies, robust foreign direct investments and growing confidence in Asia.

    In 2005, Singapore ranked eighth, having posted 13.4 per cent growth. It also took top spot in 2004 with a 22.4 per cent rise.

    Last year, the main driver of this growth came from the increase in the total value of stock market shares, up 49.3 per cent after an 18.3 per cent rise in 2005. Other factors included low inflation, low taxes and a rise in savings.

    The report also showed that wealthy investors worldwide had shifted more money into property, lured by high returns from commercial real estate investments. This was most evident in the Asia-Pacific, with 29 per cent of assets of the wealthy held in property, up from 16 per cent a year earlier.

    Mr Matthews said the biggest threat to this boom in wealth would be an unexpected slowdown in the Chinese economy.

    Here, the growth in the ranks of millionaires is expected to continue this year, as property prices surge and more expatriates make Singapore home, industry experts say.

    Said CIMB-GK economist Song Seng Wun: 'The en bloc sales have made some people instant millionaires.'

    Added Mr Ku Swee Yong, director of marketing and business deve- lopment at Savills Singapore: 'This growth is not surprising, given the rise in the equity market.

    'I expect more middle and senior management executives to join the millionaire ranks this year, as the equity market continues to surge.

    'The expansion of the private wealth business here is expected to continue, and we'll see more wealthy people relocating here as a result.'

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    Default Re: In S'pore: 11,660 new millionaires

    Published June 29, 2007

    S'pore leads world in growth of the wealthy

    More than 11,000 people joined ranks of high-net-worth individuals last year, says report

    By GENEVIEVE CUA


    (SINGAPORE) Tiny Singapore has pipped other global markets to register the fastest increase in the number of high-net-worth individuals - 21 per cent last year, beating India and Indonesia, a new report shows.

    The latest Merrill Lynch and Capgemini world wealth annual report found that last year more than 11,000 individuals entered the ranks of the high-net-worth in Singapore, defined as those with financial assets of over US$1 million. The total number of Singaporean wealthy reached 66,660 in 2006. Financial assets include private equity holdings, stocks, bonds, funds and cash, but exclude the primary residence.

    Merrill Lynch senior director and chief Asia strategist Mark Matthews said: 'Singapore has accelerated in terms of pure economic growth and domestic savings. It also enjoys a benign inflation and tax environment.

    'We think Singapore is in the midst of an impressive transition. It is to South-east Asia what Miami was to Latin America, a place where the wealthy come to bank their money, educate their children and get culture. Now we think Singapore is metamorphosing into a Zurich and Monaco not just for South-east Asia but for all of Asia.

    'It's becoming a very important financial hub and it will become a leisure hub as well. For that reason we're very bullish on Singapore.'

    Attesting to its impact as a financial centre, hedge funds are already gravitating towards the Chinatown area, which Mr Matthews likened to Mayfair in London. Merrill Lynch expects hedge fund assets here to burgeon from US$25 billion currently to US$100 billion in three years.

    Thanks to a strong global economy and robust stock markets, global wealth rose by 11.4 per cent to US$37.2 trillion. Last year 9.5 million people globally held over US$1 million in financial assets, a rise of 8.3 per cent. The ranks of the ultra-high-net-worth - those with over US$30 million in assets - rose 11 per cent to nearly 95,000. Merrill Lynch managing director Kong Eng Huat said: 'In most regions, the growth of wealth exceeds the rise in the number of high-net-worth individuals. This reflects the global concentration of wealth.'

    In Asia, the combined wealth of high-net-worth people rose 10.5 per cent to US$8.4 trillion. Asia accounts for five of the top ten fastest-growing wealth markets. Merrill Lynch and Capgemini expect to publish their wealth report for the Asia-Pacific in October.

    Real estate appears to be a key driver of wealth. Asians' allocation to real estate was the highest globally in 2006 at 29 per cent, up from 16 per cent in 2005. Globally, the average allocation to real estate was 24 per cent, up from 16 per cent previously. In Singapore, Mr Matthews expects real estate values to be sustained in prime areas, spreading out to outlying areas as well as the HDB market.

    'Singapore is becoming a different place so property prices will go higher. (It is) on par now with Sydney but its tax rate is a fraction. Singapore will be a global financial centre, therefore prices will reflect this. Right now, higher rentals are very concentrated in grade An office space or residential areas in the 9/10/11 districts. This will spread out across the island.'

    Property, he adds, remains affordable, and hence the prospect of government intervention is unlikely. 'People put aside about 25 per cent of their salary towards a mortgage or rental here. In New York it's not unusual to have the proportion go to 40 per cent. Affordability is not yet an issue.'

    The report said wealthy people have liquidated some alternative investments in favour of real estate. 'We see this as a temporary tactical move rather than a long-term asset allocation shift,' it said. Lower market volatility took the shine off alternative investments, which include hedge funds, structured products and foreign currencies.

    Global real estate investments, including direct real estate and Reits, hit a record US$900 billion last year. Among the Asian wealthy, 51 per cent of real estate investments was in 'other' investment property, including second homes and vacation homes. Some 30 per cent was in commercial real estate and 19 per cent in Reits.

    Asia's allocation to fixed income assets was the lowest at 15 per cent compared to the global average of 21 per cent. It has the highest cash weighting at 24 per cent, compared to the global average of 14 per cent.

    This year, however, is expected to see some deceleration in wealth growth. US consumption is expected to slow, wielding a knock-on effect on the Chinese economy. Still, global wealth is seen to reach US$51.6 trillion by 2011 - a more moderate annual rate of 6.8 per cent.


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    The Straits Times
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    The Straits Times
    Sunday, 8 July 2007

    According to a wealth-accumulation league table compiled by an American investment bank, the number of new millionaires in Singapore grew by the fastest rate world-wide last year. And that's being reckoned in US dollars. A total of 11,660 greenback millionaires made the list, to take to 66,660 Singaporeans whose individual assets amounted to at least S$1.5 million, not counting the home they lived in. Pretty impressive, even if the list were to include resident foreigners. But before the more inquisitive of our readers do some kaypoh sleuthing to establish if the new neighbour in the five-roomer is a millionaire, courtesy perhaps of a collective sale, be prepared for more surprises. It is entirely possible there are many more millionaires in this island than published figures show. It would depend on how data is assembled and categorised.

    If the residential home were included in calculating net worth, Singapore in this period of property-asset upsizing could well have one of the world's highest concentrations of deca-millionaires per capita or per square kilometre. Mere millionaires would be common. There would be a decent number of traditional-Chinese and traditional-Indian old-money families who keep their wealth under wraps because they are not the conspicuous-consumption type. They could be your average HDB neighbour, with an average car in the parking lot. No flash, no dash. Discreet old money will not appear in any wealth list. In the bygone days of wealth-reckoning in older economies, land owners ranked high in Rich Lists kept by nosey business publications. Then came the age of manufacturers and now, digital billionaires. Here in Singapore, the property and stockmarket are noteworthy wealth propellants. If these are kept up Singapore will be in the money for a while yet. The new millionaires created last year were not yet the beneficiaries of en bloc sales and the Shanghai bourse effect. These are 2007 phenomena.

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