As interest rates and inflation soar, Asia’s rich seek to protect their million-dollar fortunes from market fluctuations.
According to Bloomberg, as inflation soars, central banks around the world aggressively raise interest rates, markets are constantly fluctuating, the rich in Asia are becoming cautious.
According to a study by the Lombard Odier group (Switzerland), individuals holding more than 1 million USD are looking to protect their wealth against market volatility.
They stay away from stocks and bonds, focusing on private companies or assets that are considered safe like gold and cash. Rich Asians also shun cryptocurrencies due to their high volatility.
Asian investors are more cautious when inflation and interest rates rise, stock markets fluctuate sharply. Photo: Reuters.
Invest more cautiously
“Asia-Pacific investors are becoming more cautious in building their portfolios. They are turning to safer investments or private assets,” said Vincent Magnenat, Asia manager at Lombard Odier.
“At the same time, they also diversify the investment sector away from local markets,” he added. In addition, the expert said that the proportion of digital assets in the portfolios of Asia’s rich is very low.
According to the Bloomberg Billionaires Index, when technology stocks plummeted, inflation and interest rates skyrocketed, the combined wealth of the world’s 500 richest people has evaporated 1.4 trillion USD in the first half of this year alone.
Over the past two years, as central banks eased fiscal and monetary policy to support the economy through the pandemic, riskier assets like stocks and cryptocurrencies have skyrocketed, helping The rich make a lot of money.
According to Lombard Odier, 77% of respondents said their biggest concerns right now are rising prices and the impact of inflation on the global economy.
50% of respondents are concerned about volatility in the market. 56% of them have diversified their portfolios to hedge against volatility.
Individuals holding more than 1 million USD in Asia also shun crypto. 83% of respondents said they do not invest or invest less than 5% in this asset class.
The price of Bitcoin – the world’s largest cryptocurrency – has lost the mark of 19,000 USD/ dong, down 72.58% from the record of 68,789 USD/ barrel set in November last year. The total capitalization of the entire crypto market also fell below the 1 trillion USD threshold, evaporating 2 trillion USD from its peak.
Private markets take over
The Swiss banking group says concerns about low liquidity, especially among older billionaires, have spurred money into the private asset market.
According to Lombard Odie, Asian investors believe this allows them to capture structural changes and be able to manage risk. Leading the trend are the rich in Singapore and Australia. About 60% of respondents plan to increase investment in private markets.
Asia’s rich are pouring money into private markets or safer assets like cash and gold. Photo: Reuters.
Lombard Odier’s survey was conducted with 450 richest individuals in Singapore, Hong Kong, Japan, Thailand, Philippines, Indonesia, Taiwan and Australia. The Swiss company manages approximately 358 billion Swiss francs (363 billion USD) of clients globally.
According to Jean-Francois Aboulker, in charge of ultra-high-net-worth clients, the rich in all markets and all ages are concerned about lack of management, unpredictable risks and volatility in the market.
@ Zing News