Global wealth report: The pandemic reshuffles the wealthiest group
Overall, the number of millionaires shrank by just 1% in the first half of 2020. But the array of wealth implications triggered by the pandemic results in an unusually large number of new millionaires and an unusually large number of demoted millionaires.
The number of millionaires soared in 2019, reaching 51.9 million worldwide. In the first half of 2020, the group shrank by 56,000, just 1% of the 5.7 million millionaires added in 2019. Membership, however, has expanded in some countries and decreased in others due to stock market falls and currency devaluation caused by the pandemic. Our Global wealth report 2020 explores the topic.
China records the largest gains in the number of millionaires
The US still has more millionaires than any other country, but China recorded the largest gains in the first half of 2020, with an increase of 365,000 between January and June. The country cemented second place position after the US in the ranking of net gains since January 2019.
China, one of the countries that specialize in the "new economy" sectors, has seen increased business and a strong rise in stock prices. Robust equity markets made China the region with the fastest growing value of financial assets and led to an almost 40% increase in market capitalization.
Between June 2019 and June 2020, the number of millionaires grew by 5,632.
Stock market turmoil and uneven recovery have shaken the wealthiest group
The initial reaction of stock markets to the pandemic was severe. The markets gained confidence by the end of March. The recovery, however, hasn't been even across industries and sectors. Those fortunate to hold assets in growing sectors will move up the ranking; those holding less-desirable assets will move down.
Biggest wealth winners in technology and ecommerce
We identified 13 billionaires whose wealth increased by more than 50% during this difficult period. These include six from China, four from the United States and one each from Canada, Hong Kong SAR, and Malaysia. Most (7) list their industry as technology, and the most common sector (4) is e-commerce.
China, Japan, and Korea have the most billionaires: the wealth of these individuals at the end of June was actually a little higher than in February. This conforms with the importance of the automotive and technology industries in those countries.
Billionaires in the United States fared about average, reflecting their spread across all industries. The countries where billionaires have fared least well include Italy and the United Kingdom, both of which were badly affected by COVID-19, shackling firms across a broad swath of industries.
The US remains a strong leader in terms of the number of UHNW individuals.
The pandemic will have further implications for the wealthy
One of the core economic features of the pandemic is the variation in outcomes across industries and sectors. Internet shopping and support for remote working arrangements have been given a huge boost. High street shops and restaurants may suffer in both the short and long term. The same is likely to be true for airlines and their suppliers now that the desirability of non-essential travel has been challenged.
Industry sector has become more important than ever. Wealth mobility has been much more evident in the top wealth group. 2021 looks to be another turbulent year for millionaires and ultra-high net worth (UHNW) individuals.