India’s billionaire club shrinks by 5%, says World Ultra Wealth Report

Are the rich getting richer? Well, not in India.

Other emerging economies such as Brazil, China, and South Africa also saw their ultra-rich population lose a few members and a chunk of their wealth, says the World Ultra Wealth Report 2013 from UBS AG and Wealth-X. The report tracks the number and total wealth of individuals with a net worth of over $30 million.

Fewer Indians

India’s billionaire club saw its numbers shrink by five per cent, losing six members to become 103 last year; their combined wealth also declined by the same percentage.

Mumbai is home to 30 billionaires, of which, one in three is associated with industrial conglomerates or the pharmaceuticals industry, says the Wealth-X and UBS Billionaire Census.

So, why is there a drop at the top? One reason is they are mortals like the rest of us.

“Billionaires do not live forever,” says Jay Jhaveri, Head of Business Development, Asia, Wealth-X, a wealth research provider. As their fortune is divided among the heirs, the wealth sees some re-distribution, he added.

The report noted that if the club was widened to include those with a net worth of over $30 million, the total wealth grew at a modest 1 per cent. About 120 new members were added to this category — more than in any other BRICS nation — making it 7,850 strong. Wealthy Indians donated over 10 per cent of their net worth to charities annually over the past three years.

Real issues

Brazil saw a much more drastic shrinkage in the ranks of the $30 million-plus category, with a double-digit decline in their numbers and fortunes. They shed about $95 billion in wealth. An important reason for this is the fortunes of one man — Eike Batista.

The oil and gas baron, formerly ranked number 7{+t}{+h} in Forbes listing of the world’s richest, saw his wealth dissipate as his company OGX, worth as much as $35 billion in 2011, slid into bankruptcy.

This occurred at a time when Brazil’s GDP growth in 2012 was a mere 0.9 per cent and the country suffered from rising household debt, government corruption and an increasing trade deficit that dampened investor confidence.

Dragon diversifies

China too saw a trimming in the numbers and prosperity of its super rich, with a 5 per cent decline. A relatively tardy economic performance and low expectations for 2013 coupled with a credit squeeze, triggered a stock market fall and dented the net worth of the wealthy.

However, those with over $500 million or more did quite well for themselves in China, possibly because of their foreign investments, particularly in Hong Kong, which saw a 13 per cent growth in the total wealth of its ultra rich.

South Africa losing out

The population of the $30 million-plus club in South Africa lost 10 members and was down to 775 as of June 2013, even as their total wealth was unchanged. However, their numbers grew by over 30 per cent in Nigeria. If this trend continues, Nigeria will topple South Africa as the top African nation that is home to the ultra rich.

(This article was published on December 1, 2013)
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