India replaces Spain as top 10 wealth market – Datamonitor

Despite continued setbacks in the global wealth market, affluent individuals will rise by 20 million per year, and India will continue to climb within the top 10 wealth markets list, research by Datamonitor has suggested.

Datamonitor’s 2012 report into the global wealth market found that the eurozone crisis, natural calamities and falling stock markets drove a decline in the global sovereign wealth market in 2011.

In that year, the world’s 258 million affluent individuals, defined as those holding $50,000 or more in liquid assets, represented just 7.3% of the total adult population globally, but accounted for 77% – or $61 trillion – of the total global liquid assets, only a slight increase on the 2007 value of $57 trillion. 2013 is expected to be another difficult year for the global wealth market.

However, strong performances in India and China drove growth the Asia Pacific market, which the report considers to be on a path toward becoming the largest wealth market in the world. Despite a warning that India may lose its investment grade status from credit rating agency Standard & Poor this week, the report marked India’s entry into the world’s top 10 wealth markets, in terms of dollar millionaire holdings in 2011, replacing Spain.

Ireland is expected to enjoy a resurgence, outperforming the other PIIGS economies. Strong performances are also expected from the UK and US.

Matia Grossi, senior analyst at Datamonitor Financial Services, said: “The US will remain the largest high net worth market in the world through 2015, in terms of both number of millionaires and their holdings. Since the financial crisis of 2008, the US government has stepped up its commitment to ensuring that the super-rich with offshore assets pay their fair share of taxes. This is expected to push many to repatriate at least some of their offshore holdings, boosting the onshore, declared wealth market for the world’s wealthiest country.”

“The continuing eurozone crisis, a slowing Chinese economy and escalating political instability in the Middle East are all contributing factors to the unpredictability that is expected to continue in global markets over the next couple of years,” explains Grossi “This will translate into continued stock market volatility as seen in 2011 and early 2012.”

“However, given a more stable economic recovery and a steadier resolution of the eurozone debt crisis, stock market volatility could be subdued by 2014, which is expected to boost the number of affluent individuals, adding about 20 million to their ranks per year at a global level.”

 

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