Friday, October 14, 2011

Malaysia’s rich spend mostly on cars, yachts and planes

KUALA LUMPUR, Oct 14 — When they have some extra cash to blow, Malaysia’s rich prefer splurging on a fancy new set of wheels, luxurious yachts or private jets, the Asia-Pacific Wealth Report 2011 has revealed.
These big spenders see less glitter or glamour in jewellery or swanky watches, unlike their rich Southeast Asian counterparts in Singapore, who prefer burning bucks on these sparkling adornments.
Last year, 46 per cent of Malaysia’s rich invested their ringgit in luxury collectibles like cars, boats and jets, the highest percentage of any country within the Asia-Pacific region.
In 2010, 46 per cent of Malaysia’s rich invested their ringgit in luxury collectibles like cars, boats and jets, the highest percentage of any country within the Asia-Pacific region. — Reuters file pic
The region’s average topped at just 30 per cent, with Malaysia leading the list and followed by Taiwan at 38 per cent, Indonesia 36 per cent, China 35 per cent, Japan and Australia tied at 30 per cent, South Korea 28 per cent, Hong Kong 23 per cent, India 21 per cent and Singapore, merely six per cent.
Twenty-four per cent of Malaysia’s rich chose jewellery over gleaming sports rims while 16 per cent took a fancy to acquiring rare collectibles like special wines or old coins.
A small 10 per cent thronged art galleries to spruce up their collections while others invested in their favourite sports teams and other miscellaneous “investments of passion”.
The report, released yesterday by Merrill Lynch Global Wealth Management and Capgemini, surmised that such “investments of passion” would continue to hold appeal to all “high net worth individuals” or HNWIs within the Asia-Pacific market as the ranks of the wealthy in the region continue to grow at a brisk pace.
HNWIs are defined as those having investable assets of US$1 million (RM3.13 million) or more, excluding primary residence, collectibles, consumables, and consumer durables.
“Investments of passion hold appeal for all HNWIs, both for their aesthetic appeal and their potential to gain in value. Asia-Pacific HNWIs’ appetite for investments of passion increased in 2010, especially in emerging markets that suffered less than developed economies in the global downturn,” the report said.
The report also said last year’s spending pattern revealed that a majority of HNWIs in Asia-Pacific remained most heavily invested in real estate and equities.
An estimated 30 per cent of the financial assets of Malaysia’s rich is in real estate, followed by 28 per cent in equities, 26 per cent in fixed income, 10 per cent in cash or deposits and six per cent in other alternative investments.
A majority of the HNWIs’ holdings also stayed within their respective home regions, the report added.
“Malaysia, China, and India, the allocations to home-region investments remained high at around 85 per cent,” it said.
When compared to its neighbours in the region, however, the report said Malaysian HNWIs assets were the least diversified with 86 per cent in home-region investments.
The report surmised that the Asia-Pacific HNW segment had “thrived” last year but was expected to face a slump this year and in 2012.
“The number of HNWIs in the region grew to 3.3 million in 2010, from 3.0 million in 2009, making the HNWI population 18.3 per cent larger than in 2007.
“As a result of that growth, the Asia-Pacific HNWI population also became the second-largest in the world, overtaking Europe (which had 3.1 million HNWIs in 2010), and nearing that of North America (3.4 million),” the report said.
Economic expansion in the region was likely to “abate slightly”, however, this year and in 2012, as economies absorb the withdrawal of fiscal and monetary stimulus, rising inflation, constrained capacity, and the macroeconomic imbalances prompted by large foreign-capital inflows.
“As a result, GDP growth in Asia-Pacific excluding Japan is expected to slow to 6.9 per cent in 2011, and 6.8 per cent in 2012 (down from 8.3 per cent last year),” it said.

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