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Millionaire club in India grew faster than others

The club of millionaires in India grew faster than any other country last year, according to a reputed compilation wealthy people worldwide. Read on

business Updated: Jun 25, 2008 20:39 IST
HT Correspondent

The club of millionaires in India grew faster than any other country last year, according to a reputed compilation wealthy people worldwide.

The number of people high net worth individuals, whose financial assets top $1million each, grew 22.7 per cent through 2007, the strongest across all continents, said the World Wealth Report 2008 from Capgemini and Merrill Lynch.

The news comes at a time when a surge in inflation and rising interest rates are increasingly eroding the incomes of vast population of the country, leaving them little money to save for the future.

Globally there are 10.1 million individuals categorised as high net worth individuals, or HNWIs, and the number grew at 6 per cent in 2007.

Growth wise, China followed India, where 20.3 per cent more millionaires were added in 2007. But the number of Chinese millionaires, totaling 415,000, was three and half times of those in India.

One of the key factors driving the number of the wealthy people was the boom in the stock market. India saw 95 companies coming with their initial share offerings, or IPOs, in the year 2007 as compared to 73 in the year 2006. The BSE Sensex during the year grew by 45 per cent, which saw capital gains for numerous individuals.

While the HNWI category added significant millions to their financial wealth, they moved with caution when it came to making investment.

They increased their investment exposure to cash, bank deposits and fixed income securities by 9 percentage points during the year, take it to 44 per cent, the report said. Their exposure to real estate fell from 24 per cent of the total assets in the year 2006 to 14 per cent in 2007. Investment in equity gained marginally by two percentage points, it said.

Going forward, investment in real estate is expected to dip further to 11 per cent through 2009, while equity investment and cash, deposit and fixed income investment is expected to remain at the current levels, the report said.

By region, Middle East that has been gaining significantly on the reigning high prices of crude oil saw the number of HNWIs growing at 15.6 per cent. Latin America was second in line and saw it growing by 12.2 per cent, primarily led by growth in Brazil driven by the commodity boom.

When it comes to the wealth creation, Latin America surpassed Middle East region to grow at 20.4 per cent against 17.5 per cent in mid east. Asia Pacific as a region saw the number of HNWIs growing by 8.7 per cent whereas the wealth created grew by 12.5 per cent.