Taiwan ranked eighth in the list of richest countries worldwide last year, as the financial assets of Taiwanese households climbed 6.3 percent annually, driven by strong stock markets and the development of insurance and pension assets, Allianz Group said in a wealth report released on Wednesday.
The increase was faster than the 5.8 percent pickup seen a year earlier, but lagged behind the world’s 7.7 percent gain, the report said.
Taiwan’s net financial asset per capita stood at 90,260 euros (US$104,611) last year, making it the eighth-richest in the world, down from seventh in 2016, as Singapore overtook Taiwan by moving up one rung, Allianz said.
In the region, Taiwan came in third after Japan and Singapore, while Switzerland recaptured the top spot after losing the title to the US a year earlier, it said, adding that European nations put up a better showing due mainly to a stronger euro.
Taiwan’s insurance and pension assets grew 9.8 percent, reflecting the need of private pension provision in a rapidly aging population, Allianz said.
However, bank deposits remained the dominating asset class in Taiwanese households’ portfolio, amounting to 40 percent of their total financial assets, followed by insurance and pensions with a share of 26.4 percent, it said.
The 63 percent increase in financial assets outpaced the growth of bank loans at 4.8 percent last year.
The debt-to-loan ratio reached a new high of 89.4 percent, but Taiwanese households are still in a more comfortable position than their peers in other highly indebted Asian nations where their financial assets are almost six times their liabilities, Allianz said.
There was a noticeable shift in investment behavior last year, when equities received significant fund inflows, Allianz said, adding that savers largely ignored shares and investment funds in the post-2008 financial crisis years.
Unsurprisingly, securities enjoyed by far the strongest growth of all asset classes last year, increasing 12.2 percent in total and accounting for more than 42 percent of all savings, it said.
Receivables from insurance companies and pensions came in second, with a 29 percent share and an increase of 5.2 percent, it added.
Allianz chief economist Michael Heise said gone are the times when an extremely expansive monetary policy provided for a continuous upward trend on financial markets.
Instead, rising interest rates, trade conflicts and increasingly populist politics cause tensions and turbulences, he said.
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