Hong Kong's Millionaires add to wealth, get younger

The wealth of Hong Kong dollar millionaires surged last year, even as their numbers remained stagnant, according to a Citibank survey.

Hong Kong's 274,000 millionaires increased their wealth 17.6 percent on the back of strong economic growth and a bullish stock market, the annual Citibank Hong Kong Consumer Wealth Review found.

On average, each held about HK$4 million in liquid assets last year, up from HK$3.4 million a year earlier.

For the purposes of the survey, to be a considered a millionaire, an individual must have liquid assets of HK$1 million or more. Property assets do not qualify.

The review, conducted every year since 2003, polled by phone more than 3,000 Hong Kongers, with ages ranging from 21 to 79, between November and mid-December for the 2005 edition.

It found the number of millionaires composed 5.3 percent of the adult population within the survey age group - that is, five millionaires in every 100 Hong Kongers.

The age of the group is getting younger, with those under 40 swelling to 26 percent last year from 23 percent in 2004, according to the survey.

"When the investment market and economy perform well, more jobs are available and salaries rise, so Hong Kong's working population gets wealthier," said Weber Lo, chief operating officer and director of retail banking at Citibank.

"That may explain why the age of Hong Kong millionaires is getting younger."

Their numbers and wealth will keep rising this year, given the continuing expansion of the local economy, Lo said.

Citibank estimates the city's economy will grow between 4 and 5 percent this year, slower than the 7.3 percent surge in 2005.

The Hang Seng Index, a benchmark for the Hong Kong stock market, rose 4.5 percent last year. The bullish stock market adds wealth to millionaires since stock investment is their major liquid asset, Lo said.

About 49 percent of respondents said most of their gain in liquid assets came through investment in non- property assets, such as stocks, mutual funds and time deposits, while 25 percent said their gains came mostly from property investment. The estimated 274,000 millionaires had distributed 32 percent of their average HK$4 million liquid assets in stocks, 36 percent in deposits, 16 percent in mutual funds, 8 percent in bonds, and the remaining 8 percent in other investment tools.

The better investment sentiment in 2005 prompted 77 percent of the millionaires to invest in stocks, compared with 73 percent in 2004; while 65 percent placed their liquid assets into time deposits in the face of rising interest rates last year. Saving deposit rates, for example, have increased to about 2.75 percent from almost zero in early 2005.

The survey also verified common knowledge that more wealthy residents are clustered on Hong Kong Island. It found that one in seven Hong Kong Island residents are millionaires, against one in every 35 people in Kowloon and one in 28 in the New Territories and Islands.

Source: HKStandard

Tags: China | Wealth | Hong Kong