Despite slowdown, affluent Indians' wealth growing: Survey

Despite the general economic slowdown, 71 per cent of India's affluent have made money in the last 12 months. The Asian average is 59 per cent.

Based on this, about 88 per cent of India's affluent believe their wealth will grow over the next 12 months. Only Indonesians are more confident than Indians, with 98 per cent of them expecting a growth in wealth.

These are some of the findings of a survey conducted by Standard Chartered Bank and Scorpio Partnership. The survey happened between October and November 2011. It covered 2,700 affluent individuals across nine markets in Asia. This is the second year that StanChart is conducting this survey.

The respondents are individuals with income levels of $50,000 and above and reported networth of $1.4 million, said Ms Foo Mee Har, Global Head of Priority and International Banking, StanChart Bank.

Indians prefer gold

According to the survey, about 63 per cent of Indians prefer to invest in gold, against 43 per cent in rest of Asia.

“Gold was probably the only high performing asset class last year. Pretty much across Asia, stock markets were negative, if not flat. Real estate in most markets was cooling,'' Ms Mee Har said.

Going ahead gold would continue to be a favoured asset class as it is a good hedge against inflation and volatility, she added.

Gold eTFs

According to data provided by StanChart, the average return from Indian gold ETFs in 2011 was about 30 per cent. That from bond funds was 6.5 per cent and from equity funds 25 per cent. While there is no clear benchmark for real estate, Residex of National Housing Bank has given 11 per cent returns in 2011.

Another feature that came up was that more Indians are comfortable in taking loans for personal consumption. About 21 per cent of the Indian affluent are ready to take loans for large purchases, against 14 per cent of Asians.

“The whole confidence about their wealth has perhaps given Indians more risk appetite. Also, with India opening up as a market there is much more choice for consumption,'' Ms Mee Har said.

Moderation in overall confidence

Ms Mee Har said that post the financial crisis, there has been a moderation in clients' risk appetite. They are also getting more involved in understanding the different products and asset classes.

Overall there has been a moderation in confidence levels. According to this year's survey, 77 per cent of the respondents expect their wealth to increase. This is slightly lower than last year when 81 per cent respondents expected their wealth to increase.

> priyan@thehindu.co.in

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