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Asian wealth index falls US$137 billion

Bloomberg chief executive officer Richard Liu celebrates the company’s initial public offering on the NASDAQ in New York on May 22, 2014.

Photo: AP

The 128 people in Asia with enough money to make the 500-member Bloomberg Billionaires Index lost a combined US$137 billion this year, the first time wealth in the region has dropped since the ranking started in 2012.

Global trade tensions and concerns that stock valuations are too frothy hammered some of the area’s biggest fortunes.

China’s tech sector was hit particularly hard, while India and South Korea were not spared. The declines occurred even as banks and money managers aggressively stepped up efforts to cater to Asia’s richest people.

“Difficult stock market conditions this year and the uncertainty of the trade tensions likely have been a challenge to many businesses,” said Philip Wyatt, a Hong Kong-based economist for UBS Group AG, who does not see the downdraft continuing through next year or significantly reducing the ranks of billionaires.

Conditions are actually ripe for the region to create more of the mega rich as new technologies attract private capital and government support, he said.

However, for now, fear in the market is trampling fortunes. More than two-thirds of the 40 Chinese on the Bloomberg ranking saw their wealth dwindle.

Wanda Group’s (萬達集團) Wang Jianlin (王健林), whose property conglomerate is selling assets to cut debt, lost US$10.8 billion, the most of anyone in Asia. (京東) founder Richard Liu (劉強東), who was arrested in the US in August for less than 24 hours on suspicion of rape before being released, took the heaviest losses in percentage terms, with his wealth cut almost in half to US$4.8 billion.

India’s 23 richest people saw a combined US$21 billion vanish.

Lakshmi Mittal, who controls the world’s largest steelmaker, led the way, losing US$5.6 billion, or 29 percent of his net worth, followed by Dilip Shanghvi, the founder of Sun Pharmaceutical Industries Ltd, the world’s fourth-largest generic drugmaker, whose wealth declined US$4.6 billion.

South Korea’s tycoons did not escape either. The market rout lopped US$17.2 billion from the fortunes of the country’s seven richest people. The father and son who control Samsung Electronics Co, Lee Kun-hee and son Jay Y. Lee, account for more than one-third of that decline.

In Hong Kong, titans of real estate took a hit. Li Ka-shing (李嘉誠), who retired as chairman of CK Hutchison Holdings Ltd (長和集團) and CK Asset Holdings Ltd (長江實業) in March, lost US$6 billion this year, while Lee Shau-kee (李兆基), the territory’s second-richest person, ends the year about US$3.3 billion poorer.

Among Taiwanese on the list, Want Want Group (旺旺集團) chairman Tsai Eng-meng (蔡衍明) had lost US$673 million as of yesterday. He remained No. 1 among Taiwanese, ranked at 271 overall. The biggest loss to date this year was by Hon Hai Precision Industry Co (鴻海精密) chairman Terry Gou (郭台銘), down US$1.65 billion, while Ruentex Group (潤泰集團) chairman Samuel Yin (尹衍樑) had gained US$460 million to be the biggest winner.

There were plenty of other winners elsewhere to emerge this year.

Lei Jun (雷軍), chairman of Chinese smartphone maker Xiaomi Corp (小米), added US$8.7 billion, with a July initial public offering catapulting him into the Top 100 of the Bloomberg index after he started the year outside the rankings. The IPO also turned three of his cofounders into billionaires.

Japan’s richest person, Tadashi Yanai, added US$6.3 billion to his fortune as shares of Fast Retailing Co, the world’s largest apparel retailer, surged 30 percent. India’s Mukesh Ambani added US$4 billion to his fortune and eclipsed Alibaba Group Holding Ltd’s (阿里巴巴) Jack Ma (馬雲) as Asia’s richest person, thanks in part to the performance of Reliance Industries Ltd.

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