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Slump in number of HK ultra rich

Ultra high net worth wealth fell for the first time in three years in 2018, and Hong Kong is no longer the city with the world's largest population of UHNWI, according to a recent report.

Hong Kong’s ultra high net-worth (UHNW) population slumped 10.6% to 6,270 and its net wealth fell 9% to $1.18trn, according to Wealth-X’s World Ultra Wealth Report 2019.

The net reduction of 1,060 ultra-rich individuals caused Hong Kong to lose its status held in 2017 as home to the most UHNW individuals when compared to cities globally.

“The biggest losses [globally] were in Hong Kong, where the changes in net worth are often more volatile than elsewhere, given the territory’s high concentration of financial services and the strong influence of its mainland neighbour,” it said.

The latest findings confirm a trend identified in a recent survey by the Private Wealth Management Association of Hong Kong and KPMG that found the number of high net-worth individuals (people with more than $1m in investable assets) in Hong Kong dropped 10% from the previous year and the number of billionaires fell 6%.

In fact, after recording the most dynamic wealth gains of any region in 2017, Asia as a whole suffered a sharp reversal in 2018 as its UHNW population declined by 1.5% to 75,570 individuals and their collective net worth fell by 2.8% to $9.5trn, noted the Wealth-X report.

Although the combined net worth of the global UHNW population — comprising individuals with a net worth above $30m — fell 1.7% to $32.3trn, the decline was more marked in Asia than in other regions.

The Sino-US trade conflict, geopolitical tensions, tighter global liquidity and slowing economic growth weighed on demand, sentiment and financial returns which accounted for the slump, according to the report.

These factors were compounded in Asia by capital outflows, a clampdown on lending in China’s banking sector and a depreciation of most Asian currencies against the US dollar, it added.

There were modest falls in UHNW populations and wealth in Japan, Singapore, Taiwan and South Korea, “fairly stable trends” in India and Indonesia and a decline in wealth (but an increase in the number of UHNW individuals) in China, according to the report.

City status

The big fall in Hong Kong meant that New York regained its crown as the world’s largest UHNW city, with its number of ultra wealthy individuals rising 1.3% to 8,980.

Tokyo maintained its top-three city status, while London inched above Paris to be the largest UHNW city in Europe, albeit buoyed by dollar-denominated wealth gains linked to sterling weakness.

The US accounted for six of the top 10 cities, with San Francisco, Chicago and Dallas all posting firm growth in ultra wealthy numbers.

Nevertheless, Hong Kong has a significantly higher density of UHNW individuals than all other countries, 1,364 ultra rich individuals for every million adults. This was considerably higher than the next- ranked countries of Switzerland, Luxembourg and Singapore – all established financial- services hubs like Hong Kong – and more than four times the density of the US.

However, the US was by far the leading country for UHNW individuals in 2018, accounting for a 31% global share. This compared with 9% for second-placed China, and about 7% for third-placed Japan.

Just over two-thirds of UHNW fortunes were predominantly self-made, and the number of ultra wealthy women increased to around 38,700, equivalent to a record- high share of 14.6%, according to the report.

Despite the sluggish momentum in 2018, Wealth-X forecasts robust growth for the UHNW population, with a projected population increase to 353,550 individuals possessing a total combined wealth of $43trn by 2023.

Hong Kong and the top HNWI countries

Source: Wealth-X

Hong Kong and the top UHNW countries — per capita

Source: Wealth-X

Part of the Mark Allen Group.