The world’s rich lost a fifth of their wealth last year and the number of people with fortunes of more than US$1 million fell 15 percent as the financial crisis wiped out two years of growth, a study showed on Wednesday.
The total value of the world’s wealthy — people with net assets of more than US$1 million excluding their main home and everyday possessions — dropped below 2005 levels to US$32.8 trillion, the 13th annual Merrill Lynch/Capgemini World Wealth Report found.
Nearly 35 percent of that wealth belongs to so-called ultra rich people with fortunes of more than US$30 million, who account for 0.9 percent of the rich population. Last year the number of ultra-rich people and their value dropped by nearly a quarter.
“There was really nowhere to hide as an investor in 2008,” Dan Sontag, Merrill Lynch Global Wealth Management president, told a news conference. “No region ended the year unscathed.”
The US, Japan and Germany are home to 54 percent of the world’s rich and this year China surpassed Britain and now has the fourth largest rich population. Rounding out the top 10 are France, Canada, Switzerland, Italy and Brazil.
The US saw an 18.5 percent drop in its rich population, but it still remains No. 1 with 29 percent, or 2.5 million, of the world’s rich. Japan’s rich population fell 10 percent, but Germany lost only 2.7 percent of its wealthy.
As global markets plunged, wealthy investors fled with the study showing the proportion of cash-based holdings increased to 21 percent of overall portfolios, up 7 percent from 2006.
In North America, which traditionally favors equity investments, stocks made up 34 percent of portfolios of the wealthy last year, down from 43 percent a year earlier.
“That tells you how risk averse people got,” Sontag said. “Last year was about preservation, not appreciation.”
“The 2008 flight to safety imperative ... is easing now,” he said. “We’re encouraging [rich people] to return to higher risk, higher return assets and away from capital preservation instruments as conditions improve.”
Sontag said the market was showing signs of improvement and that after the technology bubble burst and the Sept. 11, 2001, attacks, rich people were able to grow their wealth at an annualized rate of 9 percent from 2002 to 2007.
“The tech downturn and the most recent crisis are not identical forms of disruption, but we’re optimistic that the recovery of wealth will follow a very similar pattern,” he said. “We still think [rich people] are expected to maintain a cautious outlook this year and next.”
The report forecast that the wealth of the world’s rich would grow to US$48.5 trillion by 2013 and that North America and the Asia-Pacific region would lead the way. The Asia-Pacific region was expected to surpass North America by 2013 as the top regional home for the world’s rich.
The study covered 71 countries and accounts for 98 percent of global gross national income and 99 percent of the world’s market capitalization.
It is based on primary and secondary research corroborated with sources including the World Bank, the IMF, national account statistics and surveys with advisers from 31 wealth management firms around the world.
ROLLER-COASTER RIDE: More than five earthquakes ranging from magnitude 4.4 to 5.5 on the Richter scale shook eastern Taiwan in rapid succession yesterday afternoon Back-to-back weather fronts are forecast to hit Taiwan this week, resulting in rain across the nation in the coming days, the Central Weather Administration said yesterday, as it also warned residents in mountainous regions to be wary of landslides and rockfalls. As the first front approached, sporadic rainfall began in central and northern parts of Taiwan yesterday, the agency said, adding that rain is forecast to intensify in those regions today, while brief showers would also affect other parts of the nation. A second weather system is forecast to arrive on Thursday, bringing additional rain to the whole nation until Sunday, it
CONDITIONAL: The PRC imposes secret requirements that the funding it provides cannot be spent in states with diplomatic relations with Taiwan, Emma Reilly said China has been bribing UN officials to obtain “special benefits” and to block funding from countries that have diplomatic ties with Taiwan, a former UN employee told the British House of Commons on Tuesday. At a House of Commons Foreign Affairs Committee hearing into “international relations within the multilateral system,” former Office of the UN High Commissioner for Human Rights (OHCHR) employee Emma Reilly said in a written statement that “Beijing paid bribes to the two successive Presidents of the [UN] General Assembly” during the two-year negotiation of the Sustainable Development Goals. Another way China exercises influence within the UN Secretariat is
LANDSLIDES POSSIBLE: The agency advised the public to avoid visiting mountainous regions due to more expected aftershocks and rainfall from a series of weather fronts A series of earthquakes over the past few days were likely aftershocks of the April 3 earthquake in Hualien County, with further aftershocks to be expected for up to a year, the Central Weather Administration (CWA) said yesterday. Based on the nation’s experience after the quake on Sept. 21, 1999, more aftershocks are possible over the next six months to a year, the agency said. A total of 103 earthquakes of magnitude 4 on the local magnitude scale or higher hit Hualien County from 5:08pm on Monday to 10:27am yesterday, with 27 of them exceeding magnitude 5. They included two, of magnitude
Taiwan’s first drag queen to compete on the internationally acclaimed RuPaul’s Drag Race, Nymphia Wind (妮妃雅), was on Friday crowned the “Next Drag Superstar.” Dressed in a sparkling banana dress, Nymphia Wind swept onto the stage for the final, and stole the show. “Taiwan this is for you,” she said right after show host RuPaul announced her as the winner. “To those who feel like they don’t belong, just remember to live fearlessly and to live their truth,” she said on stage. One of the frontrunners for the past 15 episodes, the 28-year-old breezed through to the final after weeks of showcasing her unique