• Where does India fit in?

In many places. For one, the number of HNWIs in India rose 20.5 per cent in 2006 — the second highest in the world — crossing 100,000. India is also part of three groups that have outperformed world averages: BRIC (Brazil, Russia, India and China) nations, emerging economies and Asia-Pacific. NRIs also find a mention in the report. They are a “key market segment” in Asia-Pacific.

• What is the larger picture here?

Booming economy and market capitalisation are two key factors behind the growing populace of HNWIs. The rise in oil prices in the first half of 2006 helped GDP growth in oil-producing nations whereas the subsequent fall benefited the oil importing nations. This, along with a fairly controlled inflation, saw GDP growth worldwide rise to 5.4 per cent, compared with 5 per cent posted in 2005. The growth story has been particularly strong in emerging markets. In 2006, China and India, for example, sustained real GDP growth rates of 10.5 per cent and 8.8 per cent.

Market capitalisation also strengthened the growth story. Europe, Asia-Pacific and Latin America were driven by strong corporate profits, IPO activity and ongoing foreign investment, which attracted foreign investors to invest more heavily in these markets in 2006. In Asia, for instance, the Shanghai/Shenzhen market capitalisation grew by 220.6 per cent in 2006, mainly on the strength of IPOs. South Africa, Venezuela and China were among the best performers. The boom in IPO activity was primarily due to the fact that monetary policy was tight in most regions of the world leading firms to raise capital from the public.

... contd.