Research Institute

More documents

Recommendations

Info

Figure 1 Change in total wealth (USD bn) by region, 2014–2015: Current vs. constant exchange rates Africa India Latin America China Asia-Pacific Europe North America North America Europe Asia-Pacific China Latin America –15,000 –10,000 –5,000 0 5,000 10,000 Current exchange rate India Africa Share of adult population in % Constant exchange rate Source: James Davies, Rodrigo Lluberas and Anthony Shorrocks, Credit Suisse Global Wealth Databook 2015 Figure 2 Wealth and population by region, 2015 0 5 10 15 20 25 30 35 40 Share of total wealth in % Source: James Davies, Rodrigo Lluberas and Anthony Shorrocks, Credit Suisse Global Wealth Databook 2015 shows that Europe did almost as well as North America if exchange rates are held constant and Asia-Pacific did better than China. In both India and Africa small losses are transformed into small gains. The fact that the wealth declines observed last year depend so heavily on the prevailing exchange rate cautions against giving too much attention to the consequences of these setbacks, which may well be reversed in the near future. Another point to note in Table 1 is that financial assets fell by only 3.3% worldwide while non-financial assets declined by 6.6%, so the share of financial assets rose in the global household portfolio. This is consistent with the increasing importance of financial assets observed in recent years, which has been driven in turn by rapidly increasing equity prices in the United States and other countries. It also reflects the fact that countries with greater shares of non-financial assets have more often been subject to adverse exchange rate movements. The breakdown in Table 1 shows no consistent pattern of financial assets across regions. Instead the overall global trend appears to originate primarily from two sources: the growth of financial assets in Europe, relative to non-financial assets (and before exchange rate changes are factored in); and the fact that financial assets accounted for the entire wealth growth in China. The regional distribution of wealth The geographical imbalance in global household wealth is evident from Figure 2, which compares the share of net worth of each region with its share of the adult population. North America and Europe together account for 67% of total household wealth but contain only 18% of the adult population. The shares of global wealth in the two regions have been quite similar recently, with Europe’s greater population compensating for much higher average wealth in North America. This is no longer the case: the divergence in growth performance this year has propelled North America further ahead with a current share of 37% compared to 30% for Europe. In each of the other regions, the share of wealth fails to match the population share. The deficiency is modest in the Asia-Pacific region (excluding China and India), where 24% of global adults account for 18% of global wealth; but elsewhere, the disparity between population and wealth is increasingly apparent. Despite enormous gains this century, China accounts for 21% of the adult population of the world, yet only 9% of global wealth. The ratio is similar for Latin America: 8% to 3%. However, for Africa and India, the population share exceeds the wealth share by a factor of more than ten. 6 Global Wealth Report 2015
Figure 3 Change in market capitalization, house prices and USD exchange rate (%), 2014–2015 United States United Kingdom Russia Japan Italy India Germany France China Canada – 40 –20 0 20 40 60 80 100 120 140 160 House prices Market capitalization USD exchange rate Source: James Davies, Rodrigo Lluberas and Anthony Shorrocks, Credit Suisse Global Wealth Databook 2015 China has been the outlier in equity price movements Over long periods, trends in household wealth are strongly related to economic growth, saving rates and other economic and demographic factors. Over shorter timespans, however, changes in household wealth across regions and countries are often easy to comprehend by considering movements in asset prices and exchange rates. A year ago, the global picture reflected a worldwide surge in equity prices averaging above 20%. This year they have tended to move in the opposite direction. Market capitalization fell by 35% in Russia, the most among the G8 countries shown in Figure 3. Canada and Italy also experienced double-digit losses and declines in France, Germany and the United Kingdom averaged 8%. Equity prices moved slightly upwards in the United States and India, and by a little more in Japan, although this reflects yen depreciation against the dollar. The exception is clearly China, for which market capitalization rose by almost 150% in the year to end-June 2015. At one point during the year, equity prices had more than trebled. This had less impact on household wealth in China than might be expected, because financial assets account for just half of household wealth and equities comprise a small proportion of financial assets. By the same token, the subsequent sharp reversal in equity values experienced from mid-June will have had a limited downside effect, although this will be magnified during the forthcoming year by any yuan-USD depreciation. Excluding China, the market capitalization pattern shown in Figure 3 is broadly representative of the rest of the world. Hong Kong SAR 1 rose 40% on the coat tails of China, and Ukraine posted gains even greater than China, although that was largely due to inflation. Among the losses, Brazil, Norway and Portugal were among the countries (in addition to Russia) shedding more than 25% of value, and Greece – unsurprisingly – came at the bottom, with a loss of 55%. Movements in equity prices and market capitalization reflect changes in the financial wealth of households. For the non-financial component, house price movements are a useful proxy. Around the globe, house prices were relatively stable with 75% of countries recording gains, typically between the 3% achieved in Germany and the 9% recorded for the United Kingdom. Hong Kong SAR, Ireland 1 For the sake of comparison we have included the likes of Hong Kong, which is a Special Administrative Region. Global Wealth Report 2015 7
Page 1 and 2: October 2015 Research Institute Tho
Page 3 and 4: 02 Introduction 04 Global wealth 20
Page 5: Table 1 Change in household wealth,
Page 9 and 10: in Figure 5. Greece might have been
Page 11 and 12: PHOTO: ISTOCKPHOTO.COM/ROTHIVAN Ame
Page 13 and 14: Residents of Latin America are fair
Page 15 and 16: PHOTO: ISTOCKPHOTO.COM/HALBERGMAN T
Page 17 and 18: Table 1 Real annual wealth growth r
Page 19 and 20: PHOTO: ISTOCKPHOTO.COM/EMJCOX Trend
Page 21 and 22: PHOTO: ISTOCKPHOTO.COM/LITE_2046 es
Page 23 and 24: The global wealth pyramid This chap
Page 25 and 26: and India) together account for 90%
Page 27 and 28: Figure 5 Ultra high net worth indiv
Page 29 and 30: Global Wealth Report 2015 29
Page 31 and 32: Figure 3 Number of middle-class adu
Page 33 and 34: Table 2 Wealth holdings of middle c
Page 35 and 36: Table 3 Change in number of middle-
Page 37 and 38: 2007, then shrank as a result of th
Page 39 and 40: Argentina and Egypt, they remain si
Page 41 and 42: PHOTO: ISTOCKPHOTO.COM/LUXIZENG Swe
Page 43 and 44: could rise from 21.0% of the adult
Page 45 and 46: Wealth of nations The level and dis
Page 47 and 48: China Emerging doubts Figure 1 Weal
Page 49 and 50: India Awaiting take-off Measured in
Page 51 and 52: United Kingdom Figure 1 Wealth per
Page 53 and 54: Russia A lost decade Figure 1 Wealt
Page 55 and 56: Taiwan Asian tiger Figure 1 Wealth
Page 57 and 58:
Australia Figure 1 Wealth per adult
Page 59 and 60:
Chile Sustained growth Figure 1 Wea
Page 61 and 62:
Brazil Stuttering progress Brazil
Page 63 and 64:
Imprint PUBLISHER CREDIT SUISSE AG
show all

Research Institute

Create successful ePaper yourself

Delete template?

Save as template?