Hong Kong Wealth Report 2016

The Hong Kong Monetary Authority (HKMA) acts as the central bank of Hong Kong. It was established in April, 1993 by merging the offices of the Exchange fund and the Commissioner of Banking. According to the latest World Economic Forum Competitiveness Ranking, the Hong Kong banking system is ranked the seventh best of 144 countries.

Hong Kong is the leading wealth management hub in Asia. According to Deloitte’s Wealth Management Centre Ranking 2015, Hong Kong ranked fifth of the world’s largest wealth management hubs based on assets under management between 2008 and 2014, ahead of its Asian rival Singapore.

Since 2015, Hong Kong’s economy has been under economic pressure due to deceleration in the Chinese economy; the slowest economic growth in a quarter century. A strong currency (HKD) which is pegged to the US dollar resulted in fewer tourist arrivals and slowdown in retail demand. At this juncture of possible economic slowdown the previous British colony is relying on its banking sector. The Hong Kong banking sector is in high demand among Asia-Pacific HNWIs who deposit their funds in the Hong-Kong financial services sector, due to its developed nature and attractive legal and tax structures.

Scope

• An independent market sizing of Hong Kong’s HNWIs across five wealth bands

• Analysis of Hong Kong’s HNWI volume, wealth and allocation trends from 2011 to 2015

• A detailed forecast of HNWI volume, wealth and allocation to 2020

• A geographical breakdown of all foreign assets held by Hong Kong’s HNWIs

• An alternative breakdown of liquid versus investable assets.

• Analysis of the overall size of Hong Kong’s wealth management industry

• HNWI and UHNWI asset allocations across 13 asset classes

Key Highlights

What is the total number of HNWIs in Hong Kong? How much wealth in US$ trillion do they currently hold?

How do the increases in Hong Kong’s HNWI population compare in 2014 and 2015?

How substantial is the forecast growth in the number of Hong Kong’s HNWIs by 2020? By what percentage is HNWI wealth expected to grow in the same forecast period? How much is this expected to total in US$ trillions?

Reasons to buy

• Investigate an analysis of the private banking and wealth management sector in Hong Kong and ensure your value proposition is based on the most current market information

• Evaluate HNWIs by number and volume in Hong Kong’s cities to better target prospective clients

• Assess the proliferation of family offices in Hong Kong’s wealth market and identify opportunities to expand your operations and drive revenue growth

• Investigate the five wealth bands detailed in the report to identify client preferences for wealth management services in each of these respective segments. Ensure your value proposition is aligned to increase your profitability whilst minimizing business risk

Companies mentioned

Hang Seng Bank, The Bank of East Asia, Bank of China, UBS, Standard Chartered Bank, HSBC, ABN AMRO Private Banking (Hong Kong), JP Morgan, ANZ Hong Kong, Bank Julius Baer and Co. Ltd., Bank of Communications Co., Ltd., Credit Suisse, Harris Fraser Group, ICG Asia, EFG Trust Company, Orion Partners, Financial Partners Limited, and Point72 Asset Management, L.P.

Table of Contents

Table of Contents

LIST OF TABLES

LIST OF FIGURES

1 Introduction

1.1 Details of this Report

1.2 Definitions

2 Executive Summary

3 Hong Kong Key Facts

4 Distribution of Wealth in Hong Kong

4.1 HNWI Volume and Wealth Trends

5 Findings from the WealthInsight HNWI Database

5.1 Trends in HNWI Wealth to 2020

5.1.1 HNWI trend analysis

5.1.2 Wealth band trends

5.1.3 Demographic breakdown of HNWIs

5.1.4 HNWIs – job titles

5.1.5 HNWIs – industry breakdown

5.1.6 HNWIs – industry performance

5.1.7 HNWIs – breakdown by city

5.1.8 HNWIs – city performance

5.1.9 HNWIs – city population densities

5.1.10 HNWIs – city forecasts

5.2 UHNWIs

5.2.1 UHNWI volume trend analysis

5.2.2 UHNWI wealth trend analysis

5.2.3 Demographic breakdown of UHNWIs

5.2.4 UHNWIs – industry breakdown

5.2.5 UHNWIs – city breakdown and performance

5.3 UHNWIs – Billionaires

5.3.1 Billionaire volume trend analysis

5.3.2 Billionaire wealth trend analysis

5.3.3 Billionaire per capita net worth trend analysis

5.3.4 List of billionaires

5.4 UHNWIs – Centimillionaires

5.4.1 Centimillionaire volume trend analysis

5.4.2 Centimillionaire wealth trend analysis

5.4.3 Centimillionaire per capita net worth trend analysis

5.5 UHNWIs – Affluent Millionaires

5.5.1 Affluent millionaire volume trend analysis

5.5.2 Affluent millionaire wealth trend analysis

5.5.3 Affluent millionaire per capita net worth trend analysis

5.6 Core HNWIs

5.6.1 Core HNWI volume trend analysis

5.7 Core HNWIs – Mid-Tier Millionaires

5.7.1 Mid-tier millionaire volume trend analysis

5.7.2 Mid-tier millionaire wealth trend analysis

5.7.3 Mid-tier millionaire per capita net worth trend analysis

5.8 Core HNWIs – Lower-Tier Millionaires

5.8.1 Lower-tier millionaire volume trend analysis

5.8.2 Lower-tier millionaire wealth trend analysis

5.8.3 Lower-tier millionaire per capita net worth trend analysis

6 Analysis of Hong Kong HNWI Investments

6.1 Analysis by Asset Class

6.1.1 Trends in alternative assets

6.1.2 Trends in ‘art, wine and wheels’

6.1.3 Trends of investment in real estate

6.1.4 Trends of investment in cash and deposits

6.1.5 Trends of investment in fixed-income

6.1.6 Investment trends in equity

6.1.7 Investments trends in business interests

6.2 Analysis of Foreign Investments

6.2.1 Investments in Europe

6.2.2 Investments in North America (including the US, Mexico and the Caribbean)

6.2.3 Investments in Asia-Pacific

6.2.4 Investments in South America

6.2.5 Investments in the Middle East

6.2.6 Investments in Africa

6.3 Alternative Breakdown: Liquid vs Investable Assets

6.4 Analysis of Hong Kong UHNWI Investments

7 Competitive Landscape 68

7.1 Domestic private banks

7.2 Foreign Private Banks

7.3 Wealth managers

7.4 Family offices

8 Key Drivers

8.1 HKD–US$ Exchange Rate

8.2 Real GDP Growth

8.3 Per Capita GDP

8.4 Domestic Market Capitalization

8.5 Commodity Index

8.6 Foreign Direct Investment (FDI) – Inflows and Outflows

8.7 Inflation Rate

8.8 Interest Rate

8.9 Balance of Payments

8.10 Government Debt

8.11 Stock Market Performance

8.12 Wealth Breakdowns

9 About WealthInsight

List of Tables

Table 1: HNWI Wealth Band and Group Definitions

Table 2: Hong Kong HNWIs – Volume Distribution (%), 2015

Table 3: Hong Kong HNWIs – Wealth Distribution Wealth Pyramid (%), 2015

Table 4: Hong Kong HNWIs – Industry Performance (%), 2011–2015

Table 5: Hong Kong HNWIs – Cities, 2015

Table 6: Hong Kong HNWIs – Growth in Top Cities (Thousand), 2011–2015

Table 7: Hong Kong HNWIs – Population Density in Major Cities 2015

Table 8: Hong Kong HNWIs – Populations in Top Cities (Thousand), 2011–2020

Table 9: Hong Kong HNWIs – Growth Rates for Top Cities (%), 2011–2020

Table 10: Hong Kong HNWIs – Sources of Wealth (%), 2015

Table 11: Hong Kong UHNWIs – Gender Performance (%), 2011–2015

Table 12: Hong Kong UHNWIs – Populations in Top Cities, 2011–2020

Table 13: Hong Kong UHNWIs – Growth Rates for Top Cities (%), 2011–2020

Table 14: Hong Kong Billionaires – Market Overview (Volume and US$ Billions) 2011–2020

Table 15: Hong Kong Top Billionaires (US$ Billion), 2015

Table 16: Hong Kong Billionaires – Wealth Growth (US$ Billion), 2011−2015

Table 17: Hong Kong Centimillionaires – Market Overview (Volume and US$ Million/Billion), 2011–2020

Table 18: Hong Kong Affluent Millionaires – Market Overview (Volume and US$ Million/Billion), 2011–2020

Table 19: Hong Kong Mid-Tier Millionaires – Market Overview (Volume and US$ Million/Billion), 2011–2020

Table 20: Hong Kong Lower-Tier Millionaires – Market Overview (Volume and US$ Million/Billion), 2011–2020

Table 21: Hong Kong HNWIs – Assets Allocations (%), 2011–2020

Table 22: Hong Kong HNWIs – Holdings Growth (%), 2011–2020

Table 23: Hong Kong HNWIs – Alternative Asset Composition (%), 2011–2020

Table 24: Hong Kong HNWIs – Trends of Investments in Alternative Assets (%), 2011–2020

Table 25: Hong Kong Trends in ‘Art, Wine and Wheels’, 2011–2015

Table 26: Global Prime Real Estate Prices per m2 (US$), 2015

Table 27: Hong Kong HNWIs – Foreign Investment Allocations (%), 2011–2020

Table 28: Hong Kong HNWIs – Liquidity Breakdown (US$ Billion), 2011–2020

Table 29: Hong Kong HNWIs – Liquidity Breakdown (%), 2011–2020

Table 30: Hong Kong UHNWIs – Allocations and Share of HNWI Assets (%), 2015

Table 31: Hong Kong Exchange Rate – HKD–US$ Exchange Rate, 2011–2020

Table 32: Hong Kong Real GDP Growth (%), 2011–2020

Table 33: Hong Kong GDP per Capita (US$), 2011–2020

Table 34: Hong Kong Domestic Market Capitalization (US$ Billion), 2011–2015

Table 35: Hong Kong Commodity Indices, 2011–2020

Table 36: Hong Kong Foreign Direct Investment (US$ Billion), 2011–2020

Table 37: Hong Kong Inflation Rate (%), 2011–2020

Table 38: Hong Kong Money Market Rate (%), 2011–2020

Table 39: Hong Kong Balance of Payments (US$ Billion), 2011–2015

Table 40: Hong Kong Government Debt as a Percentage of GDP (%), 2011–2020

Table 41: Hong Kong Stock Market Performance (Index), 2011–2015

Table 42: Hong Kong HNWI Wealth vs GDP Ratio (%), 2011–2020

Table 43: Hong Kong – Appendix One

Table 44: Hong Kong – Appendix Two

List of Figures

Figure 1: HNWI Wealth Band Definitions

Figure 2: Map of Hong Kong

Figure 3: Hong Kong Asset Price Performance (%), 2011–2015

Figure 4: Hong Kong HNWI Performance (US$ Billion and HNWI Volume), 2011–2020

Figure 5: Hong Kong vs Global HNWIs (%), 2011–2015

Figure 6: Hong Kong HNWIs – Growth Factor Correlation, 2011–2015

Figure 7: Hong Kong HNWIs – Wealth Pyramid (Volume Distribution), 2015

Figure 8: Hong Kong HNWIs – Wealth Pyramid (Wealth Distribution), 2015

Figure 9: Hong Kong HNWIs – Age Distribution (%), 2015

Figure 10: Hong Kong HNWIs – Job Titles (%), 2011–2015

Figure 11: Hong Kong HNWIs – Distribution by Industry (%), 2015

Figure 12: Hong Kong HNWIs – City Performance (%), 2011–2015

Figure 13: Hong Kong HNWIs – Volume of HNWIs by City (Thousand), 2011–2015

Figure 14: Hong Kong HNWIs – City Forecasts (%), 2016–2020

Figure 15: Hong Kong HNWIs – Population by City (Thousand), 2016–2020

Figure 16: Hong Kong UHNWIs – Wealth Share vs Volume Growth (%), 2011–2015

Figure 17: Hong Kong UHNWIs – Volume by Wealth Band 2011–2020

Figure 18: Hong Kong UHNWIs – Wealth by Wealth Band (US$ Billion), 2011–2020

Figure 19: Hong Kong UHNWIs – Age Distribution (Percentage Share), 2015

Figure 20: Hong Kong UHNWIs – Distribution by Industry (%), 2015

Figure 21: Hong Kong Billionaires – Market Overview (Volume and US$ Billion), 2011–2020

Figure 22: Hong Kong Centimillionaires – Market Overview (Volume and US$ Million/Billion), 2011–2020

Figure 23: Hong Kong Affluent Millionaires – Market Overview (Volume and US$ Million/Billion), 2011–2020

Figure 24: Hong Kong Mid-Tier Millionaires – Market Overview (Volume and US$ Million/Billion), 2011–2020

Figure 25: Hong Kong Lower-Tier Millionaires – Market Overview (Volume and US$ Million/Billion), 2011–2020

Figure 26: Hong Kong HNWs – Asset Class Composition (%), 2011–2020

Figure 27: Hong Kong HNWIs – Trends in Alternative Assets (US$ Billion), 2011–2020

Figure 28: Hong Kong Trends in ‘Art, Wine and Wheels’, 2011–2015

Figure 29: Hong Kong HNWIs – Foreign Investment Allocation and Growth (%), 2015

Figure 30: Hong Kong HNWIs – Global Distribution of Foreign Investments (%), 2011–2020

Figure 31: Hong Kong HNWIs – Liquidity Breakdown (%), 2011–2020

Figure 32: Hong Kong UHNWIs – Asset Class Composition (%), 2011–2020

Figure 33: Hong Kong Exchange Rate – HKD–US$, 2011–2020

Figure 34: Hong Kong Real GDP Growth (%), 2011–2020

Figure 35: Hong Kong GDP per Capita (US$), 2011–2020

Figure 36: Hong Kong Domestic Market Capitalization (US$ Billion), 2011–2015

Figure 37: Hong Kong Commodity Indices, 2011–2020

Figure 38: Hong Kong Foreign Direct Investment (US$ Billion), 2011–2020

Figure 39: Hong Kong Inflation Rate (%), 2011–2020

Figure 40: Hong Kong Money Market Rate (%), 2011–2020

Figure 41: Hong Kong Balance of Payments (US$ Billion), 2011–2015

Figure 42: Hong Kong Government Debt as a Percentage of GDP (%), 2011–2020

Figure 43: Hong Kong Stock Market Performance (Index), 2011–2015

Figure 44: Hong Kong HNWI Wealth vs GDP Ratio (%), 2011–2020

Figure 45: Hong Kong HNWIs – Volume by Wealth Band, 2011–2020

Figure 46: Hong Kong HNWIs – Wealth by Wealth Band (US$ Billion), 2011–2020

Figure 47: Hong Kong HNWIs – Wealth per Capita (US$ Million), 2011–2020

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