The 11th World Wealth Report 2007, compiled by Merrill Lynch and Capgemini, covering 71 countries accounting for over 98 per cent of global gross national income and 99 per cent of world stock market capitalisation, indicates that India along with Singapore, Indonesia and Russia witnessed the highest growth in high net worth individuals (HNWI) population. What does this mean? Is it just a demographic shift or a window to what’s happening in the economy of nations worldwide resulting in this dynamics? Deepti Bhaskaran explains

• What does it indicate?

The report gives an insight into the dynamics of macroeconomic factors driving the economy through the prism of changing paradigm of high net worth individuals’ (HNWI) investment patterns and growth. HNWIs are well informed of the present and approaching economic conditions and so they capitalise on this information by reallocating their investments to garner maximum returns out of the market trends. The report attempts to capture this shift in their investment behaviour and pans out to the larger picture of where the global economy stands and is heading.

• How have HNWIs grown?

As per 2006 figures, the population of HNWIs stands at 9.5 million — a growth of 8.3 per cent over the previous year. This increase was particularly strong in developing and less developed economies indicating a boom in economic activities worldwide. The HNWI population grew by 12.5 per cent, 11.9 per cent and 10.2 per cent in Africa, the Middle East and Latin America. The gains came riding on these emerging markets’ attempts to strengthen their infrastructure to join the league of more developed economies. Together, these HNWIs had about $37 trillion of wealth.

... contd.