Business Daily from THE HINDU group of publications
Friday, Jun 26, 2009
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Business Daily from THE HINDU group of publications Friday, Jun 26, 2009 ePaper | Mobile/PDA Version | Audio | Blogs |
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Markets
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Stock Markets Web Extras - Outlook 
Mr Pradeep Dokania (left), MD, Head - Global Wealth Management, DSP Merrill Lynch Ltd, with Mr Salil Parekh, CEO, Financial Services, India and Asia-Pacific, Capgemini, at a press conference in Mumbai to announce the Annual World Wealth Report. — Our Bureau Mumbai, June 25 The number of high networth individuals in India fell to 84,000 in 2008, from 1.23 lakh in 2007 as the equity markets tumbled, says a report by DSP Merrill Lynch and Capgemini. This is the second highest drop in the number of HNIs in any country in the world, said Mr Pradeep Dokania, Head of Global Wealth Management at DSP Merrill Lynch, at a news conference here on Thursday. India comes next to Hong Kong, which had the highest fall in HNIs last year. An HNI is an individual with investable surplus of more than $1 million. . In 2006, India recorded the second highest growth in number of HNIs, while in 2007, its HNI growth was the fastest in the world. This is the first time in seven years that the number of HNIs has fallen, said Mr Dokania. The World Wealth report by Capgemini and DSP Merrill Lynch said the total number of HNIs in the world fell close to 15 per cent in 2008. The combined wealth of the world’s rich dipped 20 per cent to $32.8 trillion. This erosion of wealth has lead many of these HNI clients to “lose their trust” in wealth management firms, said Mr Salil Parekh, CEO Financial Services-India and Asia Pacific at Capgemini. “The global economic and market downturn has shaken the trust and confidence that HNIs placed in market regulators, financial institutions and the very principles of portfolio management. It has also made most of them shift their money into safer assets such as fixed income, cash-related instruments and domestic investments,” said Mr Parekh. Cash-based holding among global HNIs increased to 21 per cent of their portfolios, said the report. “With no safe havens, HNIs ended up with significant amounts of cash in their portfolios. As markets recover, they will have the flexibility to readjust their strategies and reinvest in new and developing opportunities along the way,” said Mr Dokania.
The report said that more than a quarter of the HNIs surveyed had withdrawn their assets or even left their wealth advisors during the year. Though the findings of the current survey have been rather dismal, by 2010 things would pick up, according to Mr Dokania and Mr Parekh. By 2013, the combined wealth of the HNIs world-over would increase to $48.5 trillion from the current levels, said the report. This growth will be led by the Asia Pacific region. “Wealth accumulation and creation in the region are poised to regain traction once the global economy recovers,” said Mr Dokania. More Stories on : Stock Markets | Outlook
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