Wednesday, September 07, 2016

Growth of Indian millionaire population down from 26% to 1.1%, reports top multinational consultants Capgemini

By Rajiv Shah
In a significant report, the latest "World Wealth Report" (WWR) 2016 has revealed that the rate of growth of the high net worth individuals (HNWIs) of India has grown by just 1.1 per cent, from 198,000 to 200,000, as against 26.3 per cent, as reported in the "Asia-Pacific Wealth Report 2015".
An earlier report, “World Wealth Report 2014”, shows that while in 2012 there were 151,000 NHWIs in India, which went up by a mere two per cent in 2013 to reach 153,000. NHWIs are defined as those having investable assets of US$ 1 million or more, excluding primary residence, collectives, consumables, and consumer durables.
An annual exercise undertaken by well-known multinational consultants Capgemini with offices in 40 countries, the "Asia-Pacific Wealth Report 2015" had said pointed towards how, "following marginal growth in 2013, India recorded the latest gains -- for the region and globally -- in NHWI population (26.3 per cent) and wealth (28.2 per cent).”
High net worth individuals (in thousand)
Calling the global HNW Insights Survey as the "most thorough and expansive of its kind, with over 5,200 responses from thousands of HNWIs across 23 countries", the consultants say, it reveals that the HNWIs currently hold "less than one-third of their financial wealth with wealth managers."
The WWR 2016 points to how "strong NHWI growth in Netherlands (7.5 per cent) caused it to move ahead one place to the 11th ranking, switching places with India, which had growth of only 1.1 per cent."
Noting a major rise among India’s NHWIs in 2014, the Associated Press had, in a report titled, "Want to be a millionaire? Move to India", had said in June 2015 that India had registered "the biggest percentage gain among major countries", with the "total number of Indian millionaires — 198,000 — fast closing in on Italy", which had "219,000 millionaires last year."
Despite a sharp fall in the growth of number of NHWIs in India, the report claims that China and India remains the “biggest areas of HNWI wealth expansion through 2025”, insisting, “Asia-Pacific's expected growth momentum would help catapult HNWI wealth globally to new heights. Markets are expected to drive NHWI wealth growth through 2025 -- 27.5 per cent China, US 21.8 per cent and India 13.4 per cent, UK 10.5 per cent.”
“Growth oriented investors dominate in most markets, but are especially prevalent in Asia-Pacific (excluding Japan)”, the report states, adding, “In the this region, 68 per cent of NHWIs in India, 63 per cent in China and 61 per cent in Indonesia define themselves as growth investors.”
High net worth individuals (in thousand)
At the same time, the report says, “Although we were correct in forecasting that Asia-pacific would overtake North America as the world's largest HNWI wealth centre, it took longer than we anticipated. Our prediction, made in 2009 World Wealth Report of the shift occurring in 2013 was off by two years.”
It added, “A slowdown in key Asia-Pacific economies, including China and India, tempered HNWI wealth growth, delaying the region's move to the top spot until 2015. The final unexpected trend of the last 20 years has been the persistently high levels of cash held by HNWIs.”
The report further notes, “Despite overall strong stock market performance around the globe, HNWIs have continued to hold almost a quarter of their financial wealth in cash, an allocation they perceive as necessary to fund their lifestyles as well as to protect against market volatility. Given these conditions, HNWIs appear unlikely to change the nature of their cash allocations over the next decade.”

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