US DOLLAR millionaires in Hong Kong rose by a stunning 33% in 2010 to 101,300 well-heeled souls.
The increase is expected to slow somewhat this year given the ongoing global financial crises but these richest of the rich in Hong Kong are still expected to put more money into the local stock market, according to a Chinese language piece in Sinafinance. However, real estate will not be as popular an investment choice as before, according to the article.
The article also cited a Bank of America Merrill Lynch analyst as saying that the one-third increase in Hong Kong millionaires (based on US dollars) was surprising, given the bearish global sentiment in leading capital markets.
The East Asia market watcher from the multinational financial sector giant also said that the surge in new members to Hong Kong’s Millionaires’ Club last year, and the slightly less robust additions this year, has helped the Special Administrative Region (SAR) avert an even more disastrous year in terms of capital input.
Photo: Andrew Vanburen
However, as for the current year and looking ahead, Hong Kong’s richest risk-takers are not as property friendly as in previous years.
And given Hong Kong’s stock market benchmark index’s heavy weighting for developers, this does not necessarily bode well for the Hang Seng Index.
Bank of America Merrill Lynch’s wealth report recently noted that the number of US dollar millionaires in the Asia-Pacific region rose by a total of 9.7% year-on-year in 2010 to 3.3 million people, which surpassed the total number of US dollar millionaires in Europe for the first time in recorded history.
The report said that total assets of Asia-Pacific millionaires last year totaled 10.8 trillion usd, with Japan holding its leading position, while Mainland China ranked second with 530,000 US dollar millionaires.
The 33% jump in Hong Kong’s US dollar millionaires last year coupled with the previous year’s increase translates into the best two-year global performance on this front.
Total assets of these 101,300 Hong Kong individuals increased by a year-on-year rate of 35% to 511 bln usd.
Su Weisheng, Bank of America Merrill Lynch North Asia Chief Executive, said that the expected growth of US dollar millionaires in Hong Kong will slow this year compared to last year, but the final tally is hard to predict given the topsy-turvy market volatility this year.
He added that these Hong Kong (US dollar) millionaires accounted for 31% of total investments on the Hong Kong stock market last year, and this should jump to 39% this year as the affluent generally are more risk-averse and naturally have the expendable capital to put into the stock markets.
In addition, veteran well-heeled investors are more likely to understand that a protracted bear market offers the best best-buy opportunities for seasoned and discriminating market players.
This translates into a low-interest, high-capital investment environment which favors the more financially endowed.
Property, long the king of the Hong Kong bourse, just managed to tally a 21% share of total listed stock market investment in 2010, less impressive than the global 27% average last year.
The rising property prices in addition to the skittish macroeconomic policy, market volatility and bearish sentiment all added up to sink expectations... but investment in real estate is likely to decline some 20% in 2011 on the Hong Kong stock exchange, the report added.
See also:
CHINA’S 2011 GDP To Slow, But Remain Above 8%
Counting The Costs Of Living In SHENZHEN
