Thu, Oct 12, 2006 - Page 12 News List

Wealth on the rise in Taiwan, Merrill Lynch report says

By Amber Chung  /  STAFF REPORTER

Taiwan is one of the fastest growing wealth management markets in Asia, with the country's number of high net-worth individuals rising steadily, Merrill Lynch said yesterday.

The number of high net-worth individuals rose by 6.7 percent year-on-year to 59,000 people last year, compared with an annual growth of 6.4 percent in 2004, the US investment bank said in its Asia-Pacific Wealth Report released yesterday.

These individuals possessed combined assets worth US$190 billion, or US$3.3 million per person on average, the report said.

A high net-worth individual was defined as someone who owns assets exceeding US$1 million on top of their own residential property.

About 0.7 percent of these rich Taiwanese are "ultra-high net-worth individuals" who control more than US$30 million in assets, the report said.

Merrill Lynch has been issuing its annual World Wealth Report for 10 years, aiming to provide financial institutions with insights into the global wealth management sector.

The Asia-Pacific report is the investment bank's first survey of eight major Asian markets, including Taiwan, South Korea, India and China.

"Expanding exports and a vigorous stock market last year contributed to the increase of wealth in Taiwan," Francis Liu (劉昌欣), market director of global private clients with Merrill Lynch (Asia Pacific) Ltd, told a media briefing in Taipei.

In terms of gender, women account for 40 percent of Taiwan's high net-worth individuals -- the highest ratio in Asia -- compared with Hong Kong's 31 percent, Japan's 30 percent and China's 25 percent, the survey said.

In terms of industry, most wealthy people in Taiwan are involved in the traditional manufacturing and the high-tech sectors, it said.

Taiwanese people have accumulated a remarkable amount of wealth in the last 30 to 40 years, and they now need financial services to help them manage their assets and pursue better yields, said Sophia Cheng (程淑芬), head of Merrill Lynch's Taiwan equity research.

Local banks need to sharpen their know-how and diversify financial products to beef up their wealth management business, Cheng said.

Local banks have no time to lose if they want to capitalize on this market, as stronger foreign rivals are expanding their bases in Taiwan's financial market through acquisition, she warned.

The Asia-Pacific region is seeing fast growth in the number of wealthy people, with 2.4 million high net-worth individuals last year, up 7.3 percent from a year ago, with assets worth US$7.6 trillion, the survey showed. The amount of wealth in the region is expected to rise to US$10.6 trillion in 2010, with a compound annual growth rate of 6.7 percent, compared with 6 percent globally.

"The future of global wealth management business is in Asia, which has a number of fast-growing economies and provides huge potential to providers of wealth management services," said Raymundo Yu (楊金炎), Merrill Lynch's chairman for the Asia-Pacific region.

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