New Delhi: India’s economic growth and stock market returns created thousands of new millionaires in 2006, with the total number estimated at 100,015, the world’s second fastest growing nation after Singapore in terms of high net-worth individuals (HNWIs).
The country posted a 20.5% increase from 83,000 in 2005, just behind the 21.2% growth in Singapore, and well ahead of the 8.3% increase in millionaires worldwide, according to the World Wealth Report released by Merrill Lynch and Capgemini.
Besides India, Australia, Brazil, Canada, China, Germany, Russia, the UK and the US also have more than 100,000 people with at least $1 million (Rs4.1 crore) in net assets. Capgemini and Merrill Lynch define a millionaire as someone with $1 million-plus in financial assets such as cash, equities, bonds or funds.
They do not include the value of an individual’s primary residence or private collections of objects such as art, antiques or coins.
There were 9.5 million such millionaires worldwide with their collective wealth rising 11.4% to $37.2 trillion in 2006, the report said.
Despite its heady growth, India is well behind China where 7.8% more millionaires were created in 2006, up to 345,000. Among several events contributing to China’s 2006 gains, the study named a flurry of initial public offerings on the country’s stock exchanges that raised $45 billion in primary offerings.
China also converted two thirds of its non-tradable shares into tradable ones, creating liquidity in its stock markets.
North Americans further consolidated their top position in terms of both the number of resident millionaires and the size of their accumulated wealth.
In the US, the millionaire population expanded by 9.4%, up to 2,920,000.
While attributing the wealth generation to gains in gross domestic product and continued market capitalization growth across the world, Merrill Lynch and Capgemini predicted that the overall wealth of HNWIs will grow to $51.6 trillion by 2011 at an annual rate of 6.8%.
The number of ultra-HNWIs—individuals with financial assets exceeding $30 million—increased by 11.3% in 2006, with the global population of this extremely affluent group now estimated at94,970 people.
This year’s report included a section looking at the money spent by millionaires on so-called “investments of passion”, meaning investments in luxury goods.
More than a quarter of such investments were in private jets, sports teams, yachts or race horses, with the remainder in art, fine wine and jewellery.
“On average, art investments comprised 20% of HNWIs’ investments of passion—outlays that were dwarfed by the huge prices paid for private aircraft and yachts,” the report said.
The survey also highlighted a trend among millionaire investors to put money into the real estate market in 2006, particularly commercial real estate, to take advantage of surging rental and property prices.
Adam Plowright of AFP contributed to this story.