Mumbai: Healthy gross domestic product (GDP) growth, surging stock markets and positive real estate prices helped Indian high net-worth individuals (HNIs) report the strongest growth in wealth in the year 2017, according to the World Wealth Report 2018 by Capgemini.
According to the report, India was the fastest growing market in 2017, with a 20.4% HNI population expansion and a 21.6% HNI wealth growth.
HNI population in India expanded to 263,300 in 2017 from 218,600 in the previous year, while HNI wealth grew to $1.06 trillion from $877.4 billion in the previous year, the report said.
India edged out Netherlands to take the 11th spot on the pecking order of countries with the largest HNI population.
Globally, too, HNIs witnessed a healthy growth in their wealth in 2017, with total wealth surpassing the $70 trillion mark. Global HNI wealth grew for the sixth consecutive year, the report said.
Indian HNIs owed a lot to vibrant stock markets in 2017, which was one of the major factors for the strong performance of wealth growth.
“Market capitalization surged sharply by 51.3% in 2017, after a weak growth of 3.1% in 2016. The market grew sharply on account of strong support from local and foreign institutional investors, which helped pump liquidity into the market coupled with hopes of an improvement in economic growth and corporate earnings," the report said.
A continued upward movement in real estate prices too played a part in Indian HNIs seeing their wealth grow in 2017.
“Indian property prices continued the momentum by growing at 4.8% in 2017 as compared to 2.7% in 2016. Major regulatory reforms such as the Real Estate Regulatory Authority (RERA) and Goods and Services Tax (GST), stable demand generated through rapid development and rising household incomes are some of the important drivers of growth for real estate sector," the Capgemini report pointed out.
The fact that India continues to remain the fastest growing large economy in the world, also added wind to the sails of HNI wealth.
“Real GDP stood at $1.914 trillion, representing a rise of 6.7% in 2017 as compared to 7.1% in 2016. The major driving factor for growth was increased consumption which recovered after the liquidity crunch associated with demonetization," the report said.
Cryptocurrency investment and entry of big technology firms in wealth management emerged as strong trends developing in the global wealth management industry, Capgemini said.
“While not yet a major part of HNI portfolios, there is growing interest in cryptocurrencies as an investment tool and store of value. HNIs are cautiously interested in holding cryptocurrencies, with 29% globally having a high degree of interest, and 26.9% saying they are somewhat interested," the report said.
Wealth managers, globally, are investing big bucks into technologies such as intelligent automation and artificial intelligence, as they prepare for big technology companies to play a larger role in the industry, the report added.