A report from Merrill Lynch Global Wealth Management, a division of Bank of America, has found that wealthy Chinese invested 42 percent of their wealth in stocks last year.
The report on wealth management in the Asia-Pacific region published Wednesday said the number of rich Chinese, with net assets of at least $1 million (not including assets such as real estate and durable goods) reached 535,000 in 2010, ranking second in the region and fourth in the world.
The total wealth of rich Chinese stood at $2.66 trillion last year, up 13.2 percent from 2009, it said.
Regarding their preference for investment, the report found that stocks and real estate properties are their prime investment targets.
It said by the end of 2010, their investment in the real estate sector made up 27 percent of their total investment, with 42 percent in stocks, much higher than the average investment level in such sectors in the region.
The report predicts that in the coming year the investment proportion of wealthy Chinese in the real estate sector will drop to 39 percent due to concerns over the government's tightening control over housing prices; while their investment in stocks will decrease to 21 percent.
It is predicted rich Chinese will reduce their cash holdings next year due to rising inflation, while their investment appetite for products with high risks and higher returns will grow, it said.
A senior official at Merrill Lynch Wealth Management, who is in charge of the Chinese mainland and Taiwan market, said China's strong economic growth is the main reason for the rapid rise of the number of rich Chinese and their increasing wealth.
There will be a large growth potential for wealth management institutions in the country because of the large scale of the Chinese market and its rapid growth, he said.
Merrill Lynch is the wealth management division of Bank of America. By June 30, the total assets of the clients managed by Merrill Lynch exceeded $1.5 trillion.
Chinese mainland had 535,000 millionaires in 2010
The Chinese mainland registered a 12-percent year-on-year increase in its number of millionaires last year, boosted by economic growth and equity market gains, a Capgemini report said Thursday.
The Chinese mainland registered a 12-percent year-on-year increase in its number of millionaires last year, boosted by economic growth and equity market gains, a Capgemini report said Thursday.
The combined wealth of the mainland's 535,000 high net worth individuals (HNWIs) topped 2.66 trillion U.S. dollars, up 13.2 percent from 2009, accoring to a joint report issued by Capegemini and Merrill Lynch Global Wealth Management.
The number of millionaires on the mainland makes the region the second-largest HNWI market in the Asia-Pacific region and the fourth-largest in the world after the United States, Japan and Germany, according to the report.
China is continuing to see an expansion in its HNWI population and their wealth, fueled by strong macroeconomic growth and market performance, particularly in equities and real estate, said Pauline Ko, market manager for China at Merrill Lynch Global Wealth Management.
The mainland's HNWIs had 42 percent of their investments in equities and 27 percent in real estate last year, the report said.
Wei Zhen, Asia strategist with Merrill Lynch (Asia Pacific) Ltd., said that he expects Chinese millionaires to gradually reduce their wealth allocation in the equity and property markets, as the government will not loosen its grip on the real estate market anytime soon and global equity markets may turn volatile.
Wei projected that China's economy will expand by 9.3 percent this year and nine percent in 2012.
The report also said the number of millionaires in Hong Kong reached101,300, up 33.3 percent from 2009, the fastest growth globally for the second consecutive year due to rising asset prices. Their total wealth reached 511 billion U.S. dollars last year, up 35 percent from a year earlier, marking the world's top growth rate, the report said.
The number of HNWIs in the Asia-Pacific region hit 3.3 million last year, replacing Europe for the first time as the world's second-largest HNWI market after North America.
HNWIs are defined as individuals who have investable assets of one million U.S. dollars or more, excluding primary residences, collections, consumables and consumer durables.
