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Singaporean wealth market: set for further growth

10th October 2007
By David Lalich

Singapore's wealth market is poised for further growth over the next five years.

Singapore's individual wealth is set to increase by 2011, despite an anticipated world economic slowdown in the coming years. It is expected that the number of wealthy individuals will rise from around 410,000 in 2006 to over 600,000 by 2011. The assets they hold will increase from almost $140 billion to around $210 billion, respectively - an average annual increase of over 7%.

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Singapore is already occupied by a majority of the world's leading financial institutions and competition among wealth managers will intensify as the local wealth market expands. With more Singaporean individuals poised to join the ranks of the wealthy over the next five years, wealth managers will do well to attract these new clients to their firms, while also gaining great share of wallet from current clients as the asset holdings of wealthy Singaporean residents increase.

Singapore has experienced an increase in both the number of wealthy individuals and the value of their onshore assets. In 2006, there were over 410,000 individuals in Singapore with $60,000 (SGD90,000) or more in onshore liquid assets, an increase from 340,000 wealthy individuals in 2002. Wealthy Singaporean residents held almost $140 billion in onshore liquid assets in 2006, having grown at an annual compound growth rate of 6.2% since 2002.

The recent economic performance of Singapore reflects that the country has fully recovered from its problems and is now set for further growth. Singapore operates as an open and free-market economy, which leaves it heavily dependent on foreign trade and investment from other international economies. As a result, the Singaporean economy suffered from a series of adverse events between 2001 and 2003, including the global economic downturn and the SARS virus outbreak that spread across parts of east Asia. However, returned international trade and tourism since 2004 have allowed Singapore to produce strong economic growth and sharp increases in its equity values.

A global market downturn is expected during the course of 2008 to 2009, as the major economies of the US and the UK cool off. Despite this, Datamonitor expects Singapore's wealth market to grow over the next five years at a greater rate than the previous five years. It has been forecast that there will be over 600,000 wealthy individuals in Singapore, holding aggregate onshore assets of around $210 billion by 2011, with onshore liquid assets held by wealthy individuals living in Singapore likely to increase by 7.1% between 2007 and 2011.
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