The number of Hong Kong billionaires — individuals with net assets of $1 billion or more — grew in 2018, but their individual wealth contracted due to volatile equity markets and the weak yuan that year, a report released on Friday shows.
Swiss bank UBS and global accounting firm PwC said that the number of Hong Kong billionaires increased from 67 to 71 last year, while total wealth in the city decreased 4.5 percent to $319.8 billion, ending its five-year rally.
Swiss bank UBS and global accounting firm PwC said that the number of Hong Kong billionaires increased from 67 to 71 last year, while total wealth in the city decreased 4.5 percent to $319.8 billion, ending its five-year rally
Wealth value was dragged down by the equity market turmoil last year, particularly in the fourth quarter, said Amy Lo, co-head of UBS Wealth Management Asia Pacific.
Hong Kong stocks dropped 13.6 percent during 2018 — the worst performance in seven years. About HK$4.5 trillion ($575 billion) in market capitalization was wiped out since the beginning of the year.
Meanwhile, China’s yuan began to weaken from April 2018 and ended the year with a depreciation of 5 percent, while the US dollar strengthened, Lo added. She said many billionaires’ wealth is linked with their companies’ valuation. Since the valuation dropped due to the currency, their wealth decreased inevitably.
Fewer billionaires on the Chinese mainland were able to become or maintain their status as well. The number of mainland billionaires fell by 48 to 325, and the total net worth declined 12.3 percent.
Mainland entrepreneurs have become the world’s second-largest billionaire group over the past five years. About 98 percent of them are self-made, compared with 59 percent in Hong Kong.
Total wealth among billionaires was down 4.3 percent globally, in the face of trade friction and fears of lower economic growth.
Looking ahead, Lo expects billionaires’ wealth to see an increase this year, as equity markets in both Hong Kong and the US registered upticks in 2019.
She said that although Hong Kong’s economy has entered a recession, no significant capital outflows have been seen.
Lo believes Hong Kong will continue to be a wealth management center in the future. The SAR government released a whole package of 16 new policy measures on Wednesday to promote the development of the Guangdong-Hong Kong-Macao Greater Bay Area, including the establishment of a cross-border wealth management connect program.
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