SINGAPORE - The ranks of Singapore's ultra- wealthy shot up last year - along with their combined wealth - on the back of strong economic growth and increased savings.
The number of high net worth individuals - those with investable assets of at least US$1 million (S$1.25 million), excluding homes - rose from 100,500 in 2012 to 105,100, according to a report released yesterday.
This increase works out to about 4.5 per cent, while the combined wealth held by this group jumped 7 per cent, from US$489 billion to US$522.5 billion.
If not for Singapore's lacklustre stock and real estate markets last year, those numbers would have been higher, said the report from consultants Capgemini and Royal Bank of Canada.
But the Republic's above average growth in gross domestic product has helped add millionaires at a steady clip.
"Singapore's business owners and entrepreneurs have become more wealthy because of their own ability to create wealth through their own business, which has benefited from Singapore's strong economic growth," said Capgemini Apac's vice-president and senior account executive Claire Sauvanaud. "So, in spite of the stock and real estate markets going down, many Singaporeans have become wealthier."
Hong Kong's wealthy population grew as well, up 9.4 per cent to 124,000, with their combined wealth surging nearly 12 per cent to US$626.9 billion, driven by rising stock and real estate markets.
A study from the Boston Consulting Group earlier this month showed that 100 of every 1,000 households in Singapore had investable assets of US$1 million or more last year - one of the highest rates in the world.
According to the latest report, the number of wealthy individuals around the world rose 15 per cent from 2012 to 13.7 million last year, while their combined wealth grew to US$52.62 trillion, marking five years of growth since the 2008 financial crisis.
While the United States had the most millionaires - 4.33 million - the Asia-Pacific was a close second at 4.32 million. It is pipped to overtake the US this year, led by Japan and China.
Already, Asia's rate of growth in the number of wealthy individuals and their combined wealth outpaced America's last year. Asia's combined wealth was up 18 per cent to US$14.2 trillion, while America's grew 17 per cent to US$14.88 trillion.
The report noted a clear shift by Asia's rich towards trying to expand their wealth rather than merely preserving it.
In Asia, they reduced their focus on wealth preservation from 38.9 per cent to 31.1 per cent, and raised their preference for seeking growth from 31.5 per cent to 40.7 per cent.
Many of the wealthy in Singapore tend to invest at or close to home, observed Mr Renato de Guzman, chief executive of Bank of Singapore. "This bias in favour of Singapore and Asia could have caused them to miss out on strong returns generated by developed markets in the US and Europe in the past few years."
This article was first published on June 20, 2014.
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