Indonesia HNWIs Had Combined Wealth of USD 241 Billion in 2011, Says WealthInsight14 Jan 2013 • by Natalie Aster
As of 2011, there were over 37,400 HNWIs in Indonesia, with a combined wealth of US$241 billion. The total number of HNWIs in Indonesia increased by 67% during the review period (2007–2011), while HNWI wealth rose by 91%. This was the highest growth for any major country in the world, above the likes of China (41% growth) and India (32% growth). The wealth of HNWIs in Indonesia was positively influenced by an appreciation of the local currency against the US dollar, strong local equity and real estate markets. The total number of HNWIs in Indonesia is forecast to grow by 123%, to reach just over 83,500 individuals by 2016. This represents a higher growth than other emerging markets such as China (83% growth) and India (103% growth).
The new report "Indonesia – 2012 Wealth Book: Asia’s Emerging Giant" by WealthInsight states that in 2011, equities were the largest asset class for HNWIs in Indonesia (25.4% of total HNWI assets), followed by real estate (24.6%), cash (14.9%), fixed income (14.2%) and alternatives (7.2%). Business interests’ recorded the strongest growth over the review period, driven by new business formation in the country. Equities were the worst performing asset class, mainly due to the poor performance of foreign equity markets. Over the forecast period, equities are expected to be the top-performing asset class for HNWIs, followed by business interests, real estate and alternatives. Consequently, there will be a movement away from cash and fixed income products towards equities. WealthInsight’s research shows that in 2011, 38% of Indonesian HNWIs had second homes abroad. The largest destination for these homes is Singapore, followed by London.
Indonesia – 2012 Wealth Book: Asia’s Emerging Giant
Published: October, 2012
Price: US$ 4,995.00
By the end of 2011, HNWIs in Indonesia held 30% of their wealth outside of Indonesia, which is in line with the average for worldwide HNWIs. In 2011, the rest of the Asia Pacific region made up 42.9% of the foreign assets of Indonesian HNWIs. This was followed by North America with 26.4%, Europe with 18%, Latin America with 7.3%, the Middle East with 3.7% and Africa with 2.2%.Over the forecast period, WealthInsight expects local HNWIs to further decrease their level of investment in Europe to 15.2% of foreign HNWI assets by 2016, due to ongoing concerns regarding the euro and a possible double-dip recession in Europe.
WealthInsight’s research shows that a large proportion of local wealth is currently held offshore, mostly in Singapore-based private banks. HNWIs remain invested in Singapore for reasons such as tax avoidance and risk diversification, but also higher product sophistication across the straits. Private Banks such as Credit Suisse, Julius Baer and UBS have been quick to develop their presence in Indonesia. Other international private banks such as JPMorgan Chase and Merrill Lynch still serve Indonesia’s HNWIs from Singapore. The leading locally based private banks are Bank Mandiri, Bank Negara and Bank DBS Indonesia. The capital, Jakarta, has by far the most wealth management head offices with 24, followed by Medan with 2 offices.
More information can be found in the report “Indonesia – 2012 Wealth Book: Asia’s Emerging Giant” by WealthInsight.
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