Wondering Where Rich Indians Are Investing Their Money? Here’s Your Answer
Investments have always been a hot topic of discussion in the average Indian household. There’s always a discussion if one should invest in stock, mutual funds or some other place.
Earlier, gold, as well as the real-estate, were favoured options but now Indians, in the wake of economic growth, are earning more from the stock markets.
But one of the most common question that a layman is found asking is what investment is driving these rich Indians? Noone until now has come up with an answer to this. A few days earlier a wealth report by Knight Frank has shed some light on the subject.
According to the report compared to any other place in the world, most of the rich Indians with an asset value of over $50 million, are buying stocks hands over fist. The equity market is what they are favouring when it comes to investment.
As many as 95% of wealthy Indians – in comparison to a global average of 62% – are indulging in the wavy equity markets, rather than banking on safer options such as property or bonds, the study suggested.
Due to the Equities, the global index is up 17% over the past year and India’s Sensex has also risen 14% higher than what it was before. Once Asia’s top real-estate market, India has witnessed a sharp drop in sales of the gold and property following the demonetisation, new consumer protection laws and the roll-out of a nationwide sales tax.
At 17%, property investment was among the lowest contributing factor that led to an increase in wealth among Indians. That compares with 30% for Asia and 55% of the entire world.
Experts believe that while current levels of volatility have slightly affected market operations, this is just a right phase and it is the best periods to go for the investment in the equities.
Another reason why equities have been a good ally for rich citizens of India is due to the government’s crackdown on liquid assets, following demonetisation. With demonetisation, the government managed to wipe out an entire league of economic offenders who held hordes of black money.
While cash levels are now back at pre-demonetisation levels, investor sentiment towards property and gold have faded. India’s ultra-wealthy population, with net assets of $500 million or more, grew 18% between 2016-2017, compared with an 11 percent rise globally.
By the end of 2022 those in that super-rich category will have swelled to 340 people, with a 70% jump, the report estimated.
Among other things, India is now home to 121 billionaires as per business magazine Forbes’ list of billionaires for 2018.