Thursday, June 28, 2007

Excuse me, Are you a MILLIONAIRE?

In 2005, Singapore had the fastest growing number of millionaires in the world. In 2006, we still had the fastest growing number of millionaires in the world (see report below). But this year will make 2005 & 2006 look like kindergarden. We are seeing thousands of en bloc-ed apartment deals with owners walking away with millions in spare cash. We see HDB flats sold for $700K....I put mine up for $800K hopefully someone will bite....forgive me, I couldn't resist. We have. in addition to these, hundreds of newly minted stock market millionaires.


Despite the numbers, we are talking about the top 2% of our population who are millionaires. While wealth accumulation at the top is accelerating, cost increases, fee hikes and rising cost of essentials ..and stagnant wages mean that the bottom 30-40% are worse off and a large proportion above that are probably no better off after offsetting seeing their pay hike eaten away by rising cost of living. Guess that would simply mean our GINI index will set a new high this year. ...and with the rising cost, the city, bus interchange and be will also become "more popular" with the rising number of 'sleepers'.

Singapore Inc has been very productive in 2007 creating plenty of wealth and poverty at the same time!

"Nothing motivates better than money...or rather the lack of it..." - Lucky Tan

I leave you with a popular song about the Singaporeans dreaming about joining the millionaire club....

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S'pore home to world's fastest-growing population of millionaires
By Tung Shing Yi, Channel NewsAsia Posted: 28 June 2007 1949 hrsPhotos 1 of 1

SINGAPORE : Singapore is home to the world's fastest-growing population of millionaires, according to the annual world wealth report compiled by Merrill Lynch and the Capgemini Group.
The number of high net worth individuals in Singapore grew by 21.2% last year to reach almost 67,000 millionaires.
Singapore's millionaire boom is part of a global trend that saw the number of high net worth individuals rise 8.3% to reach 9.5 million last year.
Among the super-rich are a group called the ultra-rich, with assets over US$30 million.
The growth of these ultra high net worth individuals grew 11.3%, outpacing that of high net worth individuals and suggesting a growing concentration of wealth.
"The main reasons for the growth in the number of high net worth individuals was GDP growth, which was about 8.2% in Singapore last year, and the strong market capitalisation growth reflected in the stock market. Also, Singapore's strong savings rate has helped in the creation of wealth," said Kong Eng Huat, MD of Merrill Lynch, International Bank.
India and Indonesia follow closely behind Singapore in the list of countries with the fastest-growing number of millionaires.
The survey also pointed out a growing preference among wealthy investors to put money into the real estate market.
While the high-end luxury sector in Singapore has been seeing strong demand, Merrill Lynch sees the bull run spilling over to the mass market segment over the next three years.
Mark Matthews, senior director and chief Asia Strategist at Merrill Lynch said: "More and more people are coming to work in Singapore, and as a result of that, people will move out of Districts, 9, 10, 11, into areas like Bukit Timah or East Coast, and prices are increasing in these neighbourhoods as well.
"There's not enough in the private residential sector to meet demand. I believe there are only less than 40,000 vacant condominiums left in Singapore now, and we're expecting over 100,000 people to move here this year."
Global assets held by wealthy investors rose 11.4 percent to $37.2 trillion in 2006, but the growth rate is forecast to slow to 6.8% annually over the next four years.
Going forward, Merrill Lynch expects more central banks to tighten monetary policy, bringing a possible end to the period of high liquidity that has stimulated recent growth.
Growth rates in Asia are expected to ease back as global demand slows. - CNA /ls

10 comments:

andreamonni said...

There's an interesting article by Eric Ellis on millionaires growth in Singapore, this is an excerpt: "The reasons why it’s suddenly salad days for Singapore developers seem to reside in neighbouring Indonesia, a country rated by the graft watchdog Transparency International at 130th of the 163 nations it tracks in its annual corruption survey. Jakarta’s dubious tycoons and officials have long regarded Singapore as their own private Switzerland — a handy place to stash cash, few questions asked. Indeed, a Merrill Lynch study last year noted that a third of Singapore’s 55,000 millionaires were Indonesian nationals. They control US$87 billion in assets, making Singapore an affluent suburb of Jakarta. That seems to explain why I’ve suddenly got a private banker for a neighbour.

Seeking facts from chaos, as Mao might have put it, some analysts here who know Indonesia only too well (read: had their fingers burnt there) point to the coincidence that Singapore’s boom followed the Boxing Day tsunami of 2004. The worst of that calamity was experienced just an island away from Singapore in Aceh. After the waters came another tsunami, of aid and donations. But the aid effort has been plagued by massive corruption. Indonesia’s President Susilo Bambang Yudhoyono landslid to office in 2004 on a ticket to clean up graft in his sprawling archipelago. He suspects that too much of Indonesia’s wealth is secreted away in Singapore and wants to winkle miscreants back to justice in Jakarta. Brussels too wants Singapore to co-operate with its efforts to crack down on tax shelters. But the boom in private banking has been a nice little earner for Singapore, and it’s all very tricky for a regional financial centre which trades off a self-styled global reputation for transparency, good governance and intolerance to corruption."

You can read the rest at:

http://www.ericellis.com/singtreaty.htm

Anonymous said...

Just wonder how much Jakarta or Brussels can do, since Singapore is doing what Switzerland had been doing for a long time. Of course Jakarta can make life difficult for Singapore in many ways, but those Indonesians who stashed their pile here can always find another place to put their money.

Anonymous said...

besides the influx of questionable $$$ from indonesia, does mas monetary policy have anything to do this? i understand that money supply in singapore has gone up tremendously. can anybody explain what is going on???

Worried

LuckySingaporean said...

The money supply has grown. Consumer credit has EXPLODED!!!
Some people who are not millionaires are living like millionaires.

I guess the hangover will eventually come. it is easy to be rich, it is harder to stay rich. It is also easy to feel rich, it is harder to talk away your debts later.

Anonymous said...

I was a millionaire 9in Vietnamese Currencies) for a few days in Hanoi recently. And boy the people there are frugal and practical. If not for the language problem, I would have stayed as long as possible!

Anonymous said...

Just who and where are the newly created 60,000 millionaires?

Don't see that many more people buying or driving flashier cars or splurging like tycoons should - just look at how quiet the streets become once past 9pm.

How is the figure arrived at? Folks who have a million bucks as disposable spending money, as savings or with fully paid-up mortgages equivalent to that figure??

Or those who put down a downpayment for that million-dollar and above home instantly qualify as millionaires?

Or perhaps PRC comrades who come afleeing with their millions which they park here as property, in bank accounts, etc, are also included in the 60,000 - since their money is here???

Mr Wang Says So said...

LOL ..... There's one reason they forgot to mention. Many foreigners have been coming to live & work in Singapore, and they are already millionaires when they come.

Anonymous said...

If you've seen the original Merrill Lynch report, you'll note that their definition of a millionaire is really somebody with a million dollars in spare liquid assets. You must have $1 million to spare after excluding your car, house, insurance policies, etc. In other words, you're truly a millionaire and not just one on paper. It's a definition that excludes most asset-rich heartlanders.

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