Number of high networth Asians to touch 2.8m by 2015: CLSA

Asia is likely to get richer, with the number of high networth individuals (HNIs) in the region pegged to touch the 2.8 million-mark in the next four years, driven by robust economic growth, a high savings ratio and the rise of Asian exchange rates, says a report.

According to a report by brokerage and investment group CLSA Asia-Pacific Markets, titled, 'Fat Cats in Fast Lanes: Surge in High Net-Worth Individuals', there were 1.2 million wealthy Asians in the year 2010, which is likely to swell to 2.8 million by 2015, translating into a 140% increase.
"The forces for wealth creation are extremely favourable for Asia over the coming years. As Asia gets richer, the surge in wealthy Asian spending power will become a multi-decade theme," Amar Gill, the Head of Special Projects Research at CLSA, said.
"The economies are growing faster than any other region in the world. Savings ratios are high and appreciation is a big driver of wealth," Gill added.
The rise of Asian exchange rates adds to Asians' spending power for internationally priced goods.
The report estimates that "4% Asian-currency appreciation against the US dollar will account for one-third of the increase in HNWIs by 2015".
The key sectors to benefit from this wealth boom include asset management, autos, consumer, healthcare, leisure and property. "With some USD 600 billion of stocks, these sectors will be buoyed by the wave of wealth," CLSA said.
Warning about the underlying risks in the Asian economies, which are extremely volatile to overseas markets, the report said, "A global downturn, slowdown in China's growth, an unexpected dollar rally could hinder Asian wealth expansion."
The projections of the report are much more sensitive to currency and GDP growth than stock market returns. "It is important to realise that Asia's rich generally have a larger part of their wealth in properties than equities," CLSA said.
In the Asian region, the HNIs comprise only 0.06% of the adult population, while in developed markets such as Singapore and Hong Kong, HNWIs represent 1.5% of the adult population, the CLSA said.
China will account for 60% of the rise in HNI wealth over the next five years, while Indonesia will witness the fastest HNI growth rate of 25%, as against 22% in China, Gill said.
The report analyses wealth distribution in 10 Asian economies, namely China, Hong Kong, India, Indonesia, Malaysia, the Philippines, Singapore, South Korea, Taiwan and Thailand.
HNIs were defined as those individuals with investable assets of USD 1 million or more, excluding their first homes.