Thursday, March 8, 2018

Equity Markets Investing has Increased Global Wealth

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Widespread gains in equity markets and rise in prices of physical assets have made the world a richer place. Here are some excerpts from the 2017 edition of the Global Wealth Report of Credit Suisse. 

Growth of wealth has slowed 
6.4% was the rise in global wealth in the first half of 2017. 

World Wide Wealth 
Annual percentage change in total global wealth since 2000 


How equity markets have increased global wealth

India on fast track to growth 
9.2% has been the annual growth of wealth in India since 2000. This is faster than the global average of 6%. 
Wealth is forecast to grow by 7.5% ANNUALLY to reach $7.1 trillion in 2022 

The wealth per Indian is estimated at $5,980 (Rs 3.88 lakh) 

Scourge of inequality 
But not all Indians have seen their wealth grow. 
* 92% of adults have less than $1,000 (Rs 6.5 lakh) 
* Only 42 LAKH ADULTS (0.5% of adult population) have a net worth of over $10,000 (Rs 65 lakh) 
* 1820 Adults have wealth over $50 million (Rs 325 crore) 
* 760 have more than $100 million (Rs 650 crore) 

Indians have low debt 
Debt per person: 9% of gross assets 
India: $376 (Rs 24,400) 
US: $1,40,500 (Rs 91.32 lakh) 

But interest rates in US are low, which makes repayment far easier than in India. 
At 3.5%, the EMI for a loan of Rs 91.32 lakh for 25 years comes to Rs 45,719 
In India, at 8.5%, the EMI for a similar loan would work out to Rs 73,537 

Millionaire club 
The number of millionaires in India is estimated to grow very fast in the next five years but this is dwarfed by the growth expected in China and the Asia-Pacific region and is minuscule when compared with developed nations and the world. 


How equity markets have increased global wealth


Figures in '000s 
Report based on Credit Suisse Global Wealth Report 2017 

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