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Vietnam sees millionaire population surge 14.7 pct y-o-y

Vietnam sees millionaire population surge 14.7 pct y-o-y

Friday, September 13, 2013, 17:00 GMT+7

The pool of extremely wealthy individuals in Vietnam has reportedly grown 14.7 percent year on year, the second fastest growth rate in Southeast Asia after Thailand, according to a recent report.

The regional population of ultra-high net worth individuals (UHNWs), defined as those with assets of US$30 million and up, has grown steadily over the past year, according to a report from private-wealth intelligence firm Wealth-X and the Swiss-based bank UBS.

Among surveyed regional countries, including Singapore, Indonesia, Malaysia, Thailand, the Philippines and Vietnam, the biggest growth of UHNW population was recorded in Thailand, with a year-on-year increase of 15.2 percent, from 625 in 2012 to 720 individuals this year.

Vietnam and Indonesia follow with a year-on-year growth rate of 14.7 percent and 10.2 percent, respectively.

There are about 865 UNHWs with $130 billion worth of assets in Indonesia, up from 785 individuals with a total wealth of $120 billion from the previous year.

“This wealth pool has continued to grow despite the slowdown in China, which has led to a decreased demand for Indonesian commodities and, subsequently, slower GDP growth in the archipelago of islands in 2012 compared to 2011,” according to the Wall Street Journal (WSJ).

“Those behind the report pin the continued accumulation of wealth in the region down to robust domestic consumption and a growing middle class, which is keeping the rich in countries like Indonesia and the Philippines afloat even as their markets perform relatively poorly,” WSJ reported.

Though UBS is not present in either country at present, the bank is “watching very closely,” Joseph Poon, head of Ultra High Net Worth for UBS Wealth Management in Southeast Asia, told WSJ, adding that UBS would be “keen to look into servicing clients” once rule of law and rules governing the financial industry become more transparent.

Wealthy Singapore saw its population of UHNW individuals increases by a modest 3.8 percent, but this is still less than half Hong Kong’s population of these individuals.

However, the report predicts that the significance of Singapore as a destination for the world’s wealthy to both park and manage their assets will continue to grow, citing low personal tax rates and tax exemption.

Despite optimism in Southeast Asia, the overall growth of wealth in Asia was hampered by a decline in China, where the number of UHNWs dipped 5.1 percent from the year before, WSJ reported.

The rich in Europe and North America are also bouncing back, with the wealthy population in those two regions growing faster than Asia in the past year.

The report predicts that this is but a “temporary slowdown” in the global shift of wealth to the Asian region, and predicts that Asia’s ultra-high net worth population will eclipse that of Europe in 2021, and North America by the year 2032.

Globally, British magazine the Economist has cited new data assembled by Emmanuel Saez, of the University of California, Berkeley, and Thomas Piketty, of the Paris School of Economics, revealing that the top 1 percent enjoyed real income growth of 31 percent between 2009 and 2012, compared with growth of less than 1 percent for the bottom 99 percent.

Income actually shrank for the bottom 90 percent of earners, the report said. “It seemed ominous in 2007 when the share of national income flowing to America's top 1 percent of earners reached 18.3 percent: the highest since just before the crash of 1929.

Income actually shrank for the bottom 90 percent of earners,” the Economist reported.



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