Mumbai: The number of Indian millionaires fell by 27,500 in 2011 to 125,500, down 18% from a year ago, as a sharp fall in the stock market and a weak currency wiped out gains made in the past few years, a report said on Wednesday.
The latest world wealth report by consulting firm Capgemini SA and Royal Bank of Canada (RBC) said that, besides India, Hong Kong lost 17.4% of its wealthy population, making them the top two losers in 2011.
Globally, the financial worth of rich individuals declined across all regions, with the exception of the Middle East. The 1.7% global decline is the first since the 2008 world economic crisis, a year in which the worth of wealthy persons declined by 19.5%, Capgemini and RBC said in a statement.
A wealthy individual is defined as one with immovable assets of $1 million (about Rs 5.6 crore) or more, excluding the primary residence, collectibles, consumables and consumer durables.
“Indian equity-market capitalization dropped 33.4% in 2011, after a gain of 24.9% in 2010. That decline, and domestic factors such as increasing budget/fiscal deficit, contributed to a significant drop in India’s HNI (high networth individual) population,” the report said, adding that India was the worst performer in the New York-based Morgan Stanley Capital International (MSCI) index in Asia-Pacific in 2011.
The MSCI India Index slid 37.3% as high inflation, rising debt, policy paralysis and infrastructure bottlenecks shook investor confidence, the report said.
The US still has the largest number of rich individuals at 3,067,700, which is lower than 3,104,200 in 2010. Germany came in next with 951,200 millionaires, up 27,300 from 923,900 in 2010.
Ahmed Raza Khan/Mint
“The bulk of the world’s HNI population remains concentrated in the US, Japan, and Germany. Together, the three countries accounted for 53.3% of the world’s HNIs in 2011, up slightly from 53.1% in 2010,” the report said. “The loss of HNIs in India was enough to push it from the top 12, and it was replaced by South Korea.”
The number of millionaires in South Korea also dropped to 144,000 in 2011 from 147,000 a year earlier, but the fall was less sharper than India’s. Among other emerging markets, wealthy people in China increased to 562,000 from 535,000.
“The number of HNIs in Asia-Pacific expanded 1.6% to 3.37 million in 2011, making Asia-Pacific the largest HNI region for the first time, surpassing North America’s HNI population of 3.35 million,” the report said. “North America remained the largest region for HNI wealth at $11.4 trillion compared with $10.7 trillion in the Asia-Pacific region.”
The world has 11 million millionaires, little changed from 2010, but the aggregate investable wealth, as measured by asset values, declined 1.7% to $42.0 trillion.
“The overall decline in investable wealth largely reflected the disproportionate impact of losses among higher wealth brackets, in which investors are often more likely to be invested in less liquid and more risky assets,” the report said.
In terms of assets, the wealthy’s investable wealth totalled $11.4 trillion in North America, down 2.3% from 2010; $10.7 trillion in Asia-Pacific, down 1.1%; $10.1 trillion in Europe, down 1.1%; and a 2.9% decline in Latin America