Saturday, June 11 2005 11:58 Hrs (IST) - World Time -

New Delhi: The number of high net worth individuals (HNWI), or simply people with financial assets of over $1 million excluding primary residence, in India went up by 14.6 per cent to 70,000 by the end of 2004, the World Wealth Report 2005 said yesterday (Jun 10, 2005).

"India continued to be one of the high growth areas in 2004 as around 9,000 more people joined the list of HNWIs in 2004, said Raj Sehgal, country head of Merrill Lynch, which brought out the report along with Capgemini.

"India featured prominently amongst the major stock exchanges in emerging economies with strong growth rate in market capitalisation," he said in a statement in New Delhi.

Despite a strong slump in the stock prices in the middle of 2004, Indian HNWIs were able to recover as capital markets recorded sharp upward rally in the second half.

"The two main drivers of personal wealth creation a - economic growth and market capitalisation - worked together to generate the strongest growth in high net worth wealth that we have seen in three years," Merrill Lynch president James Gorman said.

Regionally, Singapore, Hong Kong, Australia and India saw the highest rates of HNWI population growth, which wealthy people in South Africa and Middle East benefited from the rise in commodity and oil prices, the report said.

Growth generally lagged in Europe, with only UK and Spain showing growth comparable to the worldwide rate, Gorman said.

The world's high net worth wealth increased 8.2 per cent to $30.8 trillion and the number of HNWIs grew by 7.3 per cent to 8.3 million.

The report projected that global high net worth wealth will grow at a compound annual rate of 6.5 per cent over the next five years reaching $42.2 trillion by 2009.

"After 2004, a year that marked the strongest economic growth worldwide in 20 years, growth is expected to tamper in 2005. A combination of factors, including rising inflation and interest rates, is expected to slow global growth and affect the value of financial assets," the report said.

On regional growth the report said, "As goes China, so goes the region." But it expects growth in China to slow down in 2005.

"If China's growth slows as expected in 2005, its neighbours are likely to feel the pinch. One exception is India, the region's other 2004 success story," it said.