Some interesting charts and commentaries on the wealth conditions of Asia's Richest in 2008 from Capgemini's Asian Wealth Report 2009.
Here are the highlights (bold highlights mine)
``Asia-Pacific’s population of high net worth individuals (HNWIs1 ) shrank 14.2% in 2008 to 2.4 million, while their wealth dropped 22.3% to US$7.4 trillion.
``The HNWI population and its wealth were even more concentrated by the end of 2008 than they had been a year earlier. Japan and China together accounted for 71.9% of the Asia-Pacific HNWI population and 65.8% of its wealth, up from 68.8% and 62.4% respectively.
``Asia-Pacific’s Ultra-HNWIs2 suffered greater losses of wealth than Ultra-HNWIs in other regions and their population also diminished by more. At the end of 2008, Asia-Pacific’s Ultra-HNWI population was down 29.6% from a year earlier, compared with the global decline of 24.6%, and their wealth was down 35.1% vs. 24.0% globally."
Additional observation:
The chart below decomposes on the financial assets held by the High net worth individuals.
A noteworthy observation is that except for India, South Korea and Australia, the cash component of the financial assets of High Net Worth Individuals in the region have the largest share in terms distribution.
India on the other hand has equity exposure as the largest, while South Korea and Australia are substantially into real estate.
It would be interesting to see how these huge share of cash holdings would respond to "inflationary setting", which we expect would likely boost property and or stock markets.
Importantly, the Capgemini report highlights on the regulatory conditions and how it impacts on the general business environment.
The report cites some strategic disadvantages in select Asian economies as the Philippines, Vietnam and Japan.
Again Capgemini (all bold highlights mine)
``Tough’ markets (Japan, Vietnam and Philippines) have the tightest regulations in the region and are difficult to penetrate. Japan, for instance, has historically been a very tough market for Western banks as the market is dominated by local players. Foreign banks can emphasize their global reach and product expertise, but lack the branch networks and local resources of their Japanese rivals. The local wealth management segment has always been short of expert capabilities, products and services, but foreign players are still unable to win the complete trust and confi dence of Japanese clients. Foreign banks did get somewhat of a respite recently when the Financial Services Agency (FSA) eased regulations regarding how banks can interact with their securities arms. Previously, banks had been barred even from recommending services among sister divisions. The new regulation presents a major boost to foreign banks, which had been most disadvantaged by the regulation, as they lacked the same holding company structure as local banks.
``Regulations in Vietnam and the Philippines are also stringent, making these markets tough to enter. Vietnam recently revised its credit law, and has put tough restrictions on credit and bank-equity ownership. Foreign banks are concerned this law could hamper their future growth plans in Vietnam. The Philippines also puts substantial limits on the local operations of foreign wealth management firms, so many are largely operating from offshore locations."
Again overregulation has again served as a major deterrent or a significant barrier to investment flows.
You can read a summary of the report from Finance Asia here or read the entire report from Capgemini here (registration required)
Here are the highlights (bold highlights mine)
``Asia-Pacific’s population of high net worth individuals (HNWIs1 ) shrank 14.2% in 2008 to 2.4 million, while their wealth dropped 22.3% to US$7.4 trillion.
``The HNWI population and its wealth were even more concentrated by the end of 2008 than they had been a year earlier. Japan and China together accounted for 71.9% of the Asia-Pacific HNWI population and 65.8% of its wealth, up from 68.8% and 62.4% respectively.
``Asia-Pacific’s Ultra-HNWIs2 suffered greater losses of wealth than Ultra-HNWIs in other regions and their population also diminished by more. At the end of 2008, Asia-Pacific’s Ultra-HNWI population was down 29.6% from a year earlier, compared with the global decline of 24.6%, and their wealth was down 35.1% vs. 24.0% globally."
Additional observation:
The chart below decomposes on the financial assets held by the High net worth individuals.
A noteworthy observation is that except for India, South Korea and Australia, the cash component of the financial assets of High Net Worth Individuals in the region have the largest share in terms distribution. India on the other hand has equity exposure as the largest, while South Korea and Australia are substantially into real estate.
It would be interesting to see how these huge share of cash holdings would respond to "inflationary setting", which we expect would likely boost property and or stock markets.
Importantly, the Capgemini report highlights on the regulatory conditions and how it impacts on the general business environment. The report cites some strategic disadvantages in select Asian economies as the Philippines, Vietnam and Japan.
Again Capgemini (all bold highlights mine)
``Tough’ markets (Japan, Vietnam and Philippines) have the tightest regulations in the region and are difficult to penetrate. Japan, for instance, has historically been a very tough market for Western banks as the market is dominated by local players. Foreign banks can emphasize their global reach and product expertise, but lack the branch networks and local resources of their Japanese rivals. The local wealth management segment has always been short of expert capabilities, products and services, but foreign players are still unable to win the complete trust and confi dence of Japanese clients. Foreign banks did get somewhat of a respite recently when the Financial Services Agency (FSA) eased regulations regarding how banks can interact with their securities arms. Previously, banks had been barred even from recommending services among sister divisions. The new regulation presents a major boost to foreign banks, which had been most disadvantaged by the regulation, as they lacked the same holding company structure as local banks.
``Regulations in Vietnam and the Philippines are also stringent, making these markets tough to enter. Vietnam recently revised its credit law, and has put tough restrictions on credit and bank-equity ownership. Foreign banks are concerned this law could hamper their future growth plans in Vietnam. The Philippines also puts substantial limits on the local operations of foreign wealth management firms, so many are largely operating from offshore locations."
Again overregulation has again served as a major deterrent or a significant barrier to investment flows.
You can read a summary of the report from Finance Asia here or read the entire report from Capgemini here (registration required)
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