WHERE DO THE MILLIONAIRES LIVE?

Asia-Pacific has overtaken North America as home to the most millionaires for the first time, boosted by a rise in the number of wealthy in China and Japan, a report released on Wednesday showed.

The region had 3.37 million high net worth individuals (HNWIs) in 2011 compared to North America's 3.35 million, a study jointly published by consulting firm Capgemini and RBC Wealth Management found.

Europe possessed 3.17 million HNWIs, which are defined as those having investable assets of $1 million or more excluding their primary residence and luxury possessions including art.

"Asia-Pacific is now home to more high net worth individuals than any other region for the first time," Barend Janssens, head of emerging markets for RBC, told a press conference in Singapore.

Asia-Pacific overtook Europe in 2010 to take second place and a strong growth in the millionaire population -- particularly in Japan and China -- coupled with a fall in the number of the rich in North America led to the region taking first, Janssens said.

"The most significant finding is that Asia-Pacific's population of high net worth individuals grew at a rate of 1.6 percent in 2011, twice the rate of the global population of 0.8 percent," he said.

"This is driven by growth in Japan of up to 4.8 percent and China of up to 5.2 percent."

Japanese formed the bulk of the HNWIs in the Asia-Pacific, constituting 54.1 percent of the total regional population of the rich.

China and Australia ranked second and third at 16.7 percent and 5.3 percent respectively.

Together, the three countries accounted for 76.1 percent of HNWIs in the region.

Despite hosting the most HNWIs, Asia-Pacific still lagged behind in terms of total investable wealth at $10.7 trillion, compared to $11.4 trillion for North America.

International factors such as the eurozone crisis coupled with domestic issues, including, sinking property prices and inflation bit into the pockets of millionaires, said Claire Sauvanaud, vice president of Capgemini Asia-Pacific.

International capital outflows from the region also held back its rich, with China and India seeing $1.6 billion and $4.09 billion in foreign institutional investor funds leave their markets last year, data showed.

But Sauvanaud said the region -- led by economic powerhouses China and India -- would be able to weather the problems.

"The diverse nature of Asia-Pacific exports and economies means the outlook for the region as a whole remains very strong," she stated.

"China and India are the ones to watch. Despite their challenges they are likely to remain two of the fastest-growing economies in the world in the very near future."

How competitive is Australia

The World Economic Forum (WEF) has updated its list of how countries around the world stack up on its competitiveness scale.

In The Global Competitiveness Index 2012-2013: Strengthening Recovery by Raising Productivity, the WEF “define[s] competitiveness as the set of institutions, policies, and factors that determine the level of productivity of a country”.

The 12 categories the Forum measures uses to decide rankings are: institutions, infrastructure, macroeconomics, health and primary education, goods and market efficiency, higher education and training, labour market efficiency, technological readiness, financial market development, market size, business sophistication, and innovation.

On the updated scale, Australia comes in at No. 20, holding steady at it’s ranking last year, which was down four spots on the year before that. The top 10:

1. Switzerland (No. 1 last year)
2. Singapore (No. 2 last year)
3. Finland (No. 4 last year)
4. Sweden (No. 3 last year)
5. Netherlands (No. 7 last year)
6. Germany (No. 6 last year)
7. United States (No. 5 last year)
8. United Kingdom (No. 10 last year)
9. Hong Kong (No. 11 last year)
10. Japan (No. 9 last year)

The WEF highlights the strong performance of Asia-Pacific countries in the 2012-2013 survey, noting that six countries from the region made the top 10 (Singapore, Hong Kong, Japan, Taiwan, the Republic of Korea and Australia).

On Australia it says: “After losing four positions to faster-improving economies last year, Australia retains its rank of 20th and score of 5.1, just behind Korea. Among the country’s most notable advantages is its efficient and well-developed financial system (8th), supported by a banking sector that counts as among the most stable and sound in the world, ranked 5th. The country earns very good marks in education, placing 15th in primary education and 11th in higher education and training.

“Australia’s macroeconomic situation is satisfactory in the current context (26th). Despite repeated budget deficits, its public debt amounts to a low 23 percent of GDP, the third lowest ratio among the advanced economies, behind only Estonia and Luxembourg.

“The main area of concern for Australia is the rigidity of its labour market

(42nd). Indeed, the business community cites the labour regulations as being the most problematic factor for doing business, ahead of red tape. In addition, although the situation has improved since last year, transport infrastructure continues to suffer bottlenecks owing to the boom in commodity exports.”

Among Australia’s top 10 trading partners for goods and services in 2011 (as defined by the Department of Foreign Affairs and Trade) the leaderboard stacked up as follows:

1. China (No. 29 in WEF rankings)
2. Japan (No. 10)
3. Republic of Korea (No. 19)
4. India (No. 59)
5. United States (No. 7)
6. United Kingdom (No. 8)
7. New Zealand (No. 23)
8. Taiwan (No. 13)
9. Singapore (No. 2)
10. Thailand (No. 38)

As for the world’s 10 least competitive countries in descending order out of the 144 nations ranked by WEF, Burundi headed the pack:

1. Burundi
2. Sierra Leone
3. Haiti
4. Guinea
5. Yemen
6. Chad
7. Mozambique
8. Lesotho
9. Timor-Leste
10. Swaziland

September RBA Monetary policy Decision

At its meeting yesterday, the Board decided to leave the cash rate unchanged at 3.50 per cent.

Financial markets have responded positively over the past couple of months to signs of progress in addressing Europe's financial problems, but expectations for further progress are high.

In Australia, most indicators available for this meeting suggest growth has been running close to trend, led by very large increases in capital spending in the resources sector. 

At the meeting, the Board judged that, with inflation expected to be consistent with the target and growth close to trend, but with a more subdued international outlook than was the case a few months ago, the stance of monetary policy remained appropriate