TLDR: Credit suisse global wealth report 2019 - a review

I did a previous blog post with a lot of references to the Credit Suisse global wealth report 2018. The bank has launched the annual report for 2019. It has some interesting data elements to review.

If you want to download and read the report yourself, find it here.

Let us go through some interesting charts and figures from the report

Overall it has been a net positive in general across the globe with a small dip in growth for Asia Pacific compared to last year to this year.

I am quite surprised that APAC didn’t do particularly well, I would attribute this dip primarily to the USD strengthening against most developing economy countries and the report uses USD as the base currency for comparison.

Chart 2 looks at mostly OECD countries with the a few exceptions. Australia has been hurt primarily by the commodities glut, which has had an impact on its exports and the fall in value of AUD over the last few years.

The same is the case for Norway, where the fall in oil prices hasn’t helped. Turkey was more of a case of instability which also lead to a sharp fall in its currency values.

No surprises here when it comes to wealth distribution. OECD countries are wealthier than the rest of the world, with Africa still suffering the most. Centuries of colonial rule, civil wars and economic hardships have still left a big mark on Africa.

US by far is still the richest country and it is constantly added to the wealthy pool year after year. No major surprises here except for Saudi Arabia. MSM’s influence and anti corruption drives seems to have had an impact of the number of USD millionaires in Saudi.

The top 1% seem to control more and more of the wealth. I am not surprised that it is case in Russia given the oligarchs and government sanctioned/ aligned super rich. Looks like India is following suit, with the wealth getting concentrated in a fewer hands. The downward trend over the last few years is encouraging but still there is a long way to go.

Wealth by Country

United States

US by far has lead the way and most of the wealth is in financial assets.

China

I am actually a little surprised that China’s wealth is more in financial assets than real assets given the prominence in the Chinese culture to own property and use property and other real estate as investment options. The Chinese economy is not growing at such a fast clip as before and the trade wars with US is not helping china as well. The challenges with HK doesn’t help to add to its list of issues.

India

Indian market is still very much non financial, there is still a focus on real assets, be it real estate or physical gold/jewelry as assets. I also suspect there is a fair bit of money saved as FDs and savings accounts in banks.

Clearly there is a lot more room to grow into financial assets, if more of the population starts to buy up stocks, mutual funds and index funds. There is a long runway ahead of us to even get close to China forget other developed countries.

Singapore

Singapore is an anomaly in the Asian context, it is a tiny island nation with AAA rating sovereign government bond, running surplus budgets from time to time, strong financials and excellent governance. When compared to all other countries in south east Asia it does well.

The government policies around public housing means that a lot of adults own their primary residence which leads to higher real estate ownership compared to other developed economies. The higher exposure to debt is an area of concern especially when there is recession and there are head winds that can cause challenges for those who are overstretched.

Conclusion

The Credit Suisse annual global wealth report is an interesting read in its entirety. It gives us a view of how macro economic events have an impact on rise, fall and distribution of wealth across the globe given the connected nature of our trade and commerce.

Looking forward to how things pan out in 2020.

Happy Investing.

Hi.

Oct 28 Global wealth report - 2019