CFA Society Singapore
SINGAPORE (Oct 18): In the 12 months to mid-2018, wealth in Singapore grew strongly at 7.4% to around US$1.3 trillion ($1.8 trillion), according to Credit Suisse Research Institute’s (CSRI) Global Wealth Report.
CSRI expects wealth in Singapore to grow at 4.6% per annum over the next five years to reach about US$1.6 trillion in 2023.
According to the report, wealth per adult in Singapore increased by 5.3% to more than US$283,000, the ninth highest in the world. This represents a significant difference from 2000, as wealth per adult has increased by more than 146% since then, due to high savings, asset price increases, and a rising exchange rate from 2005 to 2012.
In Singapore, financial assets make up 55% of gross household wealth, a ratio similar to Switzerland, while average debt of US$53,000 is moderate for a high-wealth country, representing 16% of total assets.
Millionaires in Singapore also saw an 11.2% increase to 183,737. CSRI forecasts that this will grow by 5.5% per annum in the next five years, reaching about 239,640.
As at mid-2018, there were approximately 1,000 ultra-high net worth (UHNW) individuals in Singapore with more than US$50 million in wealth, a modest increase of 1.1% in the 12 months to mid-2018.
Meanwhile, the US contributed most to global wealth, with a total of US$98 trillion, continuing its unbroken run of growth in total wealth and wealth per adult every year since 2008.
Trailing behind US is China, with the second largest household wealth of US452 trillion. CSRI expects China’s wealth to grow another US$23 trillion in the next five years, taking its share of global wealth from 16% in 2018 to just above 19% in 2023.
On the other hand, non-financial assets have continued their accelerated growth over the past 12 months, providing the main impetus for overall growth in all regions except North America, accounting for 75% of the rise in wealth in China and Europe, and all of the rise in India.
In terms of wealth per adult, Switzerland tops the list at US$530,240 in mid-2018, followed by Australia with US$411,060.
John Woods, chief investment officer Asia Pacific for Credit Suisse, says, “In the 12 months to mid-2018, household wealth in Asia Pacific (including China and India) grew at a steady rate of 3% to over US$114 trillion, making it the largest wealth region. Currency depreciation against the US dollar continues to affect wealth trends in some of the major regional economies such as Australia and India. At the top end, Asia Pacific countries continue to make significant contribution to global high net worth wealth pool, with China, Japan, Australia, Korea and Taiwan making up more than 8.8 million millionaires, representing over 20% of the global total.”
Gender wise, women now account for about 40% of the overall global wealth, with their share of wealth increasing considerably in the 20th century. But according to the 2018 Forbes list of more than 2,200 billionaires, only 11% were females, with Germany having the largest population of women billionaires.
Nannette Hechler Fayd’herbe, global head of investment strategy and research, says, “Although there remains a wealth gap between men and women globally, in some places much more marked than others, that gap has narrowed significantly over the years and is expected to continue doing so as more women access education and participate in the labour market. There are also signs that more self-made women are succeeding in business and entering the highest wealth ranks. However, even in the countries where progress is the strongest, challenges remain. More needs to be done to ensure that women have an equal opportunity to build up, inherit and share in wealth.”
On the outlook, CSRI expects global wealth to rise by 26% over the next five years, or 4.7% per annum, reaching US$399 trillion by 2023. Emerging markets are forecasted to rise at a faster rate of 7.3% per annum and will be responsible for 32% of growth, despite accounting for 21% of the current wealth.
In addition, the number of global millionaires is projected to increase to a new all-time high of 55 million over the next five years, while UNHW individuals will reach 205,000.