Thursday, October 18, 2012

Global Wealth: Experts Not Worth Their Salt

Hantu Laut

Credit Suisse Global Wealth.........with such big name, nobody cares or dares to fault their reports. 

Rating agencies or whatever you want to call them are, sometimes,  more an abomination of indulgence rather than giving factual result.

I can understand evaluating the wealth of people who control large public listed companies, but how do you go about evaluating private wealth? 

While I do not doubt the Singapore figure of millionaires, I believe Malaysia has more than the 36,000 quoted by the agency. It is still a mystery to me what formula they used to measure the wealth of the 36,000 individuals in Malaysia. 

Many Malaysians are also tax evaders, cash rich and difficult to evaluate their true wealth. 

How do they do it? 

Do they send them questionnaires, check their tax returns, check their bank accounts, check their properties and so on, to arrive at a valuation? Because of bank Secrecy Act, no bank will divulge their customers particulars to anyone.

The report also say house prices have gone down by 40% in Malaysia. Ask any Malaysian if they agree with this ridiculous finding. 

I can't speak for other parts of Malaysia but Sabah property price has gone through the roof and heading for Cloud 9 for the developers and hell for young people to buy a home. The prices of land have also skyrocketed and profiteering by developers have made matters worse for home purchasers. 

A semi-detached house which used to cost around RM200,000 just ten years ago is now costing between RM800,000 to RM1.0 million. I presumed Peninsular Malaysia is no better than what's happening in Sabah. The prices of property in KL hasn't gone down that much either. So! where the figure came from ?

Comparing Singapore and Hongkong with Malaysia may be fair game but Indonesia is a completely different kettle of fish. Indonesia has a population of over 240 million, the 4th largest in the world, and have only 104,000 millionaires, that is horrendously worse than Malaysia.

The report also says "Malaysia was listed among “frontier” wealth countries along with Egypt, Indonesia, Tunisia and Vietnam."

That's probably the biggest gaffe or, maybe, a political fluff coming out of Credit Suisse. 

If you have visited all these countries and if you had opened your eyes wide enough, you would see, we certainly are not in the same league. Malaysia is way ahead of these countries in standard of living.

Tabled below is GDP per capita and GDP of the countries concerned:

Countries      Per capita GDP (2011)            GDP (2011) Bil
Malaysia          $15,800.-                               $453
Tunisia                9,600.-                                 102
Egypt                   6,600.-                                 303         
Indonesia             4,700.-                              1,139
Vietnam               3,400.-                                 304

On a productivity/population ratio,  Malaysia's productivity per unit economic output is still much higher than Indonesia and all the other countries with the exception of Tunisia, which has a smaller population than Malaysia.

Sometimes, the experts are not worth their salt, or is the survey correctly reported.

KUALA LUMPUR, Oct 18 — Malaysia is projected to have 76,000 millionaires in five years time, but will still be ranked behind Singapore’s 249,000 and Indonesia’s 207,000 people who are expected to be on the rich list in 2017, according to a new global wealth report released this week.
The Credit Suisse Global Wealth Report forecast total global household wealth would increase by an average of 8 per cent annually over the next five years, driven by emerging markets likeChina, Brazil, Malaysia, Russia or India.
Mean wealth per adult is projected to rise to US$67,000 (RM 203,645) by 2017 from US$48,500 this year.
The report said China is expected to surpass Japan as the second-wealthiest country in the world by 2017 while the United States should maintain its leading position.
Credit Suisse said that Singapore was in the list of top ten countries in the wealth-per adult league table, along with  Switzerland, Norway, Luxembourg, and Sweden – as well as Australia and G7 members, Japan, France, the USA and the UK.
The report added that notable cases of emerging wealth were found in Chile, Columbia, the Czech Republic, Lebanon, Slovenia and Uruguay.
Malaysia was listed among “frontier” wealth countries along with Egypt, Indonesia, Tunisia and Vietnam.
Credit Suisse said that for 2012, Malaysia has 36,000 millionaires, while Singapore has 156,000 and Indonesia 104,000 in the bracket.
Hong Kong, with 92,000 millionaires this year, will see membership in the rich club grow to 180,000 in 2017. Read more.

Phnom Penh

1 comment:

zakzak said...

Dear Sir,

I read in the paper (The Star nonetheless!) that national property prices has increased on average 12% since several years!
As a first time house buyer, the house prices in Johor is somewhat too expensive for me, so I just buy 2nd hand house, which also quite expensive. It was only 80k in 2008, now it became 130k in 2012, and it is just a small 2 bedroom house.