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Global private wealth rises to $152trillion

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The global private wealth shot to $152 trillion last year boosted by the rise in global stock markets. This is a 14% increase according a report by Boston Consulting group. The rise is mainly attributable to the increased awareness of households on investments in stocks and the confidence they have built on the stock markets in the recent past.

According to the report, North America led the pack with private wealth hitting $50.3 trillion, an increase of 15.6%. It was followed by Western Europe which showed a 5.2% increase hitting the $37.9 trillion mark. In Eastern Europe the figure jumped by 17.2% to $2.7 trillion. In Latin America it rose by 11.1% to $3.9 trillion, while in Middle East region in increased by 11.6% to reach $5.2 trillion.
Western Europe countries include Germany, UK and France, while Eastern Europe countries are Poland, Russia and Czech Republic.
According to percentages, Asia-Pacific, excluding Japan, did better with an increase of 31% giving a figure of $37 trillion.
The report by the Boston Consulting group did not take into consideration luxury goods or real estate held by the households, it only considered shares, deposits, cash and other assets.

According to the report, the drivers of this growth include the strong rebound in equity markets, the relative economic stability in the US and Europe, and signs of economic recovery in some European countries like Portugal, Spain and Ireland.
Equity markets started showing positive trends beginning the second half of 2012. This growth was consistent through to 2013, and is expected to continue even in the future. In 2013, the amount of household wealth held in equities globally increased by 28%. This is a clear indication that majority of the people preferred investment in equity to other forms of investments.

This growth in equities has also resulted in a proportionate increase in the number of millionaire households globally. The total number of millionaire households rose to 16.3 million in 2013, up from 13.7 million in 2012.

Much of the global growth is driven by the economic activities in Asia, with the households in this region being the greatest beneficiaries. Apart from the economic activities, another key contributing factor is the high saving rates in some Asian countries such as China and India. It is expected that by the end of 2018, the wealth held in this region will rise to nearly $61 trillion.

The Boston Consulting group stated that if this growth rate is sustained, this region will most likely beat Western Europe as the second-wealthiest in the region in 2014, and also beat North America as the wealthiest in 2018.

China is the economic hub of this region. The private wealth in China rose by a whopping 49% in 2013. In the same year, the number of millionaire households in China rose to 2.4, from 1.5 million in 2012. This is a pointer to the pace at which wealth is being created in this country.

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