Asia’s wealth surpass North Americans for first time: Business Times reports

Business sentiment among Asia’s top companies fell for the second straight quarter, dragged down by export-orientated economies such as China and Japan, while domestic spending helped boost Southeast Asia’s outlook, a Thomson Reuters/INSEAD survey showed.  Concerns over global demand are hurting Asia’s export engines, with autos, technology and shipping sectors among the least upbeat in the survey. Sectors more exposed to domestic growth were much more optimistic.

The Thomson Reuters/INSEAD Asia Business Sentiment Index fell to 62 in the third quarter from 69 in the second quarter of 2012, having peaked at 80 in the first quarter of 2011. A reading above 50 indicates an overall positive outlook, while one below 50 points to pessimism. The results reflect the broad economic trends in the region, where growth in Southeast Asia is holding up much better than in many other countries as domestic consumption picks up. In China, where exports support an estimated 200 million jobs, growth is widely expected to slide this year to its weakest since 1999. The Asia-Pacific region is now home to 3.37 million high net worth individuals (HNWI) – people with $1 million or more to invest – compared with 3.35 million in North America and 3.17 million in Europe, the firms said in the report.

Countries such as the Philippines, Indonesia and Malaysia have generally seen upgrades to GDP forecasts, which have been at odds with the rest of the world. As long as they haven’t got caught up with the recent down-leg in the United States, it could be that the next wave of optimism will come from Fed policy and therefore they continue to see upgrades to forecasts and continued flows of international money.

 

The Federal Reserve said last week it would pump $40 billion a month into the Us economy until the jobs market shows sustained improvement, boosting global markets. The index surveyed 200 of the Asia-Pacific’s top companies in 11 economies. There were 97 responses.  The poll, conducted by Thomson Reuters in association with INSEAD, a global management and business school, was compiled between Sept 3-14 and covered sectors such as autos, financial, property, resources and technology.

Indonesia and the Philippines had the highest score in the survey of 100, followed by Malaysia and Singapore. India was at 80.
In contrast, China recorded its weakest level of sentiment since the survey began in 2009. It showed companies on the cusp between pessimism and optimism with a reading of 50, down from 55 in the second quarter, suggesting they are seeing little lift so far from various measures put in place by Beijing to try to boost the economy. China’s export outlook remains severe and external demand in coming months may be weaker than in the first eight months of the year, Commerce Ministry spokesman Shen Danyang said on Wednesday.

 

By this, BookSpar realizes that, Asia’s riches are looking more to offshore wealth centres close to home, such as Singapore and Hong Kong, in search of wider access to products and services, tax advantages and financial confidentiality. Challenges for the offshore wealth management industry include a scarcity of skilled talent, lower profitability, and the costs of compliance and restrictions on services due to higher regulatory scrutiny. Diversity of the backgrounds and expectations of rich clients means there is more demand for tailored products and a greater desire to play an active role in managing their portfolios.

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