Elite club swells further

Merrill-Capgemini survey says HNIs grew 19.3% in '05.

Indian nationals, with net financial assets of over $1 million, owned assets worth $290 billion at the end of 2005, around 4 per cent of total wealth held by similar high networth Individuals (HNWIs) in Asia Pacific, a research said.

HNWIs in the country, grew by 19.3 per cent from around 69,500 in 2004 to nearly 83,000 in 2005, second fastest growth rate behind South Korea, whose HNWI numbers surged by 21.3 per cent during same period, Asia Pacific Wealth Report 2006 by Merrill Lynch and Capgemini revealed.

However, China and Japan were far ahead with their HNWI wealth amounting to $1,590 billion and 3,500 billion, 67 per cent of that of total Asia Pacific's.

The report, which studied eight top markets in Asia Pacific including China, Hong Kong, Indonesia, Japan, Singapore, Taiwan, South Korea and India, as these amount to 89 per cent of regions GDP, predicted further strengthening of Indian economy.

"The future looks bright for India - despite lingering doubts over its government's high budget deficit. By all accounts over the next few decades, India increasingly will integrate itself with global economy and raise its economic platform," it said.

It also predicted that by 2020, India will move from 24th to 10th place among the world's largest trading nations.

Among the various investment options used by the HNWIs, Indians relied most on equity markets with 30 per cent of their total investments accounting for capital markets.

Alternative investments (20 per cent) such as structured products, private equities and foreign currency was another option heavily exercised by Indians, while Real Estate (17 per cent) and fixed income investments (19 per cent) were other sources.

"In short term, there is very blink possibility of investments in equities eroding as indexes are witnessing strong movement and economic conditions are buoyant," DSP Merrill Lynch MD (global private client) Pradeep Dokania said.

The report was also bullish on stronger economic ties with China. Categorising the two neighbours with the highest GDPs in the world, as emerging markets, the report said : "While the wealthy sector is growing rapidly, the HNWI population lacks investment experiment and comprises a very small proportion of total population. Moreover, because of their underdeveloped capital markets, controls on currency covertibility and restrictive investment regulations, the wealth management industry only recently has been established."