Hong Kong’s class of US dollar billionaires lost US$56 billion last year, or 17.5 per cent of their combined fortunes, as the US-China trade war wrought havoc on global markets and commerce.
The number of billionaires declined to 87 in Hong Kong last year, with their combined wealth shrinking to US$259 billion, according to the 2019 survey by Wealth-X, which specialises in researching ultra high net worth individuals, or people with at least US$30 million (HK$235 million) in assets.
That decline, the steepest annual drop out of 15 global cities where billionaires live, left Hong Kong in second place behind New York as home to the world’s biggest population of billionaires, Wealth-X said.
Asian stock markets were among the world’s top losers last year, with 15 major indexes in the region losing by at least 10 per cent each. That destroyed wealth everywhere, decimating the combined fortunes of the world’s billionaires by 7 per cent to US$8.6 trillion, while their population shrank to 2,604, the second decline since the 2008 Global Financial Crisis.
Across the Asia-Pacific, the billionaire population declined by 13.4 per cent, with its combined wealth down by 8.7 per cent, with substantial falls in billionaire populations in China, India and Singapore. China’s billionaire population dropped 15.7 per cent in 2018. The total number of Asian billionaires, 677, fell back below North America at 750. The combined wealth of Asian billionaires declined by 8.5 per cent.
The report principally blamed the US-China trade war, which has negatively impacted consumption and investment returns, and dampened overall economic sentiment. This was compounded by a cyclical slowdown and credit tightening in China. Though China has opened up infrastructure spending, this was not enough to boost the fortunes of its wealthiest citizens.
The global slowdown in growth and trade also hit the Eurozone, which led to declines in the billionaire population and their total wealth. Russia’s population rose by 6.3 per cent and the UK’s number of billionaires jumped by 7.8 per cent, though their total net worth fell by 16.6 per cent.
Only North America, boosted by US economic growth figures, saw an expansion in its billionaire class. The population of US billionaires grew by 3.7 per cent. In the United States, the report cited a strong performance by US equities over the year and corporate earnings boosted by consumer demand and tax cuts, signed into law by US President Donald Trump in December 2017, as reasons for US billionaires relative success. However, the report also noted the effect of the tax cut as “shielding” US billionaires from global economic headwinds.
In asset allocation, Wealth-X noted that cash holdings among global billionaires had risen as a percentage of total assets, from 22.9 per cent in 2017 to 26.4 per cent in 2018, while public holdings fell from 41.5 to 36.4 per cent.
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