The wealth of the world’s high net worth individuals (HNWIs ) has increased 11.4 per cent to $37.2 trillion in 2006, says a report.

According to the 11th annual World Wealth Report, released by Merrill Lynch and Capgemini, the number of HNWIs in the world rose 8.3 per cent in 2006 to 9.5 million driven by a strong global economy.

The number of ultra high net worth individuals (Ultra-HNWIs ) grew by 11.3 per cent to 94,970, the report said.

Emerging economies proved resilient, with continued growth in their HNWI populations and solid investor cash flow to riskier corners of the market.

The largest growth of the HNWI population was seen in Singapore and India, where the increases were 21.2 per cent and 20.5 per cent, respectively when compared to 2005, it said.

The BRIC nations (Brazil, Russia, India and China) continued to play increasingly important roles in the global economy in 2006.

China and Russia were among the top ten countries with the fastest growing HNWI populations, the report said.

China’s HNWI population grew by 7.8 per cent and Russia’s increased by 15.5 per cent. Brazil and India also showed continued strength based on domestic private consumption and competitive service and manufacturing sectors. 

Latin America saw real GDP growth of 4.8 per cent in 2006, and lured substantial foreign direct investment.
The region’s HNWI population jumped by 10.2 per cent in 2006 as it continued to outperform the global average of 8.3 per cent, it added.

The Middle East was the only region to see a dispersion, rather than consolidation, of wealth. The global demand for oil in 2006 helped increase the number of HNWIs by 11.9 per cent, but a correction in an overvalued stock market pulled down market capitalisation rates, slowing total wealth accumulation.

“Total HNWI wealth in the Middle East increased last year by 11.7 per cent, however the overall HNWI population in the Middle East grew by 11.9 per cent, which points to a greater dispersion of wealth,” explains Amir Sadr, head of Middle East offshore, Merrill Lynch Global Private Client Group.

“The strength of oil revenues signify that public finances in the region should remain robust and it will also generate funds for capital investment, strengthening the Middle Eastern economy in the longer-term,” it added.

Real GDP and market capitalisation growth rates – the two primary drivers of wealth generation – accelerated through 2006, which helped to increase the total number of HNWIs around the world as well as the amount of wealth they control, the stud.

The realisation of economic gains on par with those of 2003 and 2004 was led by emerging markets that continued to outperform the rest of the world.

China and India, for example, sustained real GDP growth rates of 10.5 per cent and 8.8 percent respectively, in 2006.

Market capitalisations grew rapidly in Europe, Asia-Pacific and Latin America, driven by strong corporate profits, IPO activity and ongoing foreign investment.

Although performance varied across the world, almost all indices posted gains. For example, the Dow Jones World Index grew by 16.4 percent in 2006.

“This year’s Report found that the number of wealthy people, and the amount of wealth that they control, continued to increase in 2006, with extraordinary wealth creation in Singapore and India,” said Amir Sadr.

“The level of wealth creation around the world provides a tremendous opportunity for wealth management firms, and success will go to the firms that offer a service model that meets the ever-changing needs of today’s sophisticated clients.”

“The globalisation of wealth creation has accelerated,” said Bertrand Lavayssière, group director, Capgemini Financial Services.

“If 2005 was characterised by a flow of investment to international funds from HNWIs, 2006 ushered in a new e