Big fall in wealth in China as combined fortunes of ultra-rich dips for first time since financial crisis, says UBS
There were 57 fewer billionaires on the planet at the end of last year than there were a year earlier, as the global stock market rout stripped the world’s wealthiest people of a collective $388bn (£302bn). It is the first time that billionaires’ wealth has fallen since the 2008 global financial crisis.
According to a report by the Swiss bank UBS, the number of people with a paper fortune that stretches to nine zeros fell from 2,158 in 2017 to 2,101 in 2018. Billionaires’ collective fortunes dropped by 4.3% from a record $8.9tn to $8.5tn. It is still more than eight times the value of Apple, the world’s most valuable company.
“Billionaire wealth dipped in 2018 for the first time since 2008 because of geopolitics,” said Josef Stadler, UBS’s head of ultra-high net worth clients. “The billionaire boom of the past five years has now undergone a natural correction. The stronger dollar, combined with greater uncertainty in equity markets amidst a tough geopolitical environment, has created the conditions for this dip.”
The report said there was an “especially sharp” fall in wealth in China and India last year. “2018 was a challenging year as the geopolitics of US/China trade friction intensified, leading to fears of lower economic growth.
“There was a dip in wealth in 2018. But in our view this should be set within the context of the broader trend of strong growth. Billionaire wealth dropped 4.3% globally, after five years when it grew by 34.5%. As the centre of economic activity shifts towards Asia, the region’s entrepreneurs are playing a strong role. There will be many more winners and losers in the years to come.”
However, Chinese billionaires suffered the biggest losses, with their collective net worth decreasing by 12.8% because of falling stock markets, a weaker local currency, and growth in the world’s second-largest economy in 2018 slowing to its lowest level in nearly three decades.
The number of billionaires in China fell by 39 to 436. “In fact, 103 [Chinese] people’s wealth dipped below a billion dollars, while 56 made the threshold,” the report said. It added that the US tech industry, which is going through another prolonged investment boom, had created a new wave of billionaires.
“Only the Americas bucked the trend, lifted by the fortunes of US tech entrepreneurs – there were 89 US tech billionaires at the end of 2018, up from 70 in 2017.”