Frothy tech returns helped mint 600,000 millionaires last year
[NEW YORK] Global wealth surged last year, with the number of millionaires across the world hitting a record 23.4 million.
The annual World Wealth Report from Capgemini, an IT services and consulting group, shows the number of people with at least US$1 million in investable assets grew 2.6 per cent in 2024, driven in large part by gains in American portfolios.
The US alone added 562,000 millionaires, a 7.6 per cent increase from the year prior, as enthusiasm for artificial intelligence and interest rate cuts drove huge advances in the US stock market. The gains were biggest among ultra-high net worth individuals – defined as having at least US$30 million in investable assets – with their wealth jumping nearly 12 per cent in the US.
Elsewhere, the Asia-Pacific region saw a 2.7 per cent gain in millionaires, attributed to a strong equities market and easing monetary policy, and the Middle East saw a 2.1 per cent decline due to lower oil prices.
In Europe, market volatility and sluggish growth led to a consolidation of wealth at the very highest levels, with the number of individuals with US$30 million or more growing 3.5 per cent while the overall population of millionaires fell 2.1 per cent.
Across all high-net-worth portfolios, Capgemini said cash holdings remained steady, as did a 15 per cent allocation for alternative assets such as private equity and cryptocurrency.
Kris Bitterly, head of Citi Global Wealth at Work, said more investment exposure to alternatives could be key to unlocking future growth opportunities, especially with high-net-worth individuals aiming to skirt lags in their local markets.
'Many investors, presently, when you look at their asset allocations, they are significantly underweight on alternatives,' Bitterly said. Alternatives present 'unique opportunities that are not available in public markets that you want to express in your portfolio'.
Capgemini's survey, administered in January 2025, included input from dozens of wealth managers and more than 6,000 high-net-worth individuals across 71 countries. BLOOMBERG
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Straits Times
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TOKYO – As the US-China trade war expands into the auto, steel and rare earths sectors, few companies are feeling the pressure more than top Japanese car parts supplier Daido Steel. The supplier to Honda Motor and other major marques is facing a trio of headwinds: a 50 per cent tariff on US imports of steel, a 25 per cent duty on foreign-made cars and a levy on parts, and China's tightening of exports of rare earths – minerals critical to make magnets for car motors. 'They've started putting up walls,' chief executive officer Tetsuya Shimizu said in an interview at Daido Steel's headquarters in Nagoya. 'This will have a massive impact on the stability of the global economy.' It's also having major implications for the sprawling network of specialty manufacturers that are critical to the global automotive industry and now find themselves stuck between feuding superpowers. For Daido Steel, the trade war has meant renewing a push to build rare earth supply routes outside of China, which accounts for almost 70 per cent of mined material and about 90 per cent of global refining of the metals. Some new routes are already starting to form, mainly from Australia, and Mr Shimizu said there's potential in the United States, Canada and Brazil. But progress has been slow due to high costs and low supply, he said, underscoring the immense challenge facing the world's efforts to wean from their dependence on China. Daido's struggles also signal the true toll of the trade war on the auto sector will be magnitudes more than the billions of dollars forecast by top carmakers including Ford Motor and Toyota Motor. And the constant of roller coaster of escalating, then de-escalating, tensions has left companies scrambling to maintain business ties under a cloud of uncertainty. When Mr Trump initially imposed 25 per cent tariffs on steel imports in March, Mr Shimizu was able to reassure clients in the US that business could continue as normal. Customers value Daido Steel's products enough to wait months for shipments to arrive and, if they could buy comparable goods domestically in the US, 'they'd already be doing it,' he said. But his confidence vanished earlier this month when duties doubled. 'At some point it stops making sense as a business,' Mr Shimizu said. 'Asking customers to pare back orders or lean on inventory or lower production could negatively impact the entire enterprise, but that risk might be unavoidable.' Daido Steel earns most of its money supplying products to Japan's automakers – many of which sell cars in the US that are manufactured or assembled elsewhere. Collectively, the top Japanese auto brands are bracing for a US$19 billion (S$24.5 billion) hit from tariffs. Several Japanese carmakers have already started to shift or lower US production leaving suppliers like Daido Steel at the mercy of their customers' rapidly changing plans. In May, the steelmaker withheld full-year profit guidance for the current fiscal year and forecast a 34 per cent drop in first-half net income. 'It comes down to how carmakers respond,' said Mikine Kishi, general manager of the company's corporate planning department. 'If they decide they're not going to manufacture in Japan anymore, or that they'll lower total production volumes, that would have an extremely big impact on our business.' The US and China appear to have reached a detente, and Mr Trump has signed an order that prevents multiple tariffs from piling on top of each other. But rare earths are proving to be a particular sticking point in trade negotiations. China's export controls on seven individual elements, and magnets that contain even tiny amounts of them, left sectors from auto to defense urgently trying to find workarounds. Uncertainty over supply lingers, though Beijing said this month it's accelerating the review of rare earth export license applications and has approved some requests. Daido Steel had a head start in diversifying its supply chain. Back in 2010, China briefly imposed a de facto ban on exports of rare earths to Japan following a maritime dispute, kick-starting industry efforts to break their reliance on the nation. Success has been limited though: Japan depends on China for 60 per cent of its rare earths supply, down from 80 per cent to 90 per cent. As well as seeking alternative supplies, Daido Steel focused on new technology to use fewer rare earths. One of the company's key products is a neodymium magnet that doesn't include heavy rare earths including dysprosium or terbium, which has been used by Honda since 2016. Daido Steel also supplies magnets indirectly to automakers by way of Aisin Corp. and Denso Corp. – two of Japan's biggest suppliers. Daido Steel wants to expand production and industrial use of those magnets, betting that customers will increasingly look for non-Chinese supply. It also plans to build a manufacturing plant in the US, though Mr Shimizu didn't specify when or where that will happen. It would be a major disappointment if the US should slide into authoritarianism, Mr Shimizu said, because that would mean the global economy will eventually have to revolve around America. 'I'm not sure there's enough time for supply chains to transition if the goal really is to produce everything in America for America,' he said. BLOOMBERG Join ST's Telegram channel and get the latest breaking news delivered to you.
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Business Times
an hour ago
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Honda supplier rethinks China relationship as trade war bites
[TOKYO] As the US-China trade war expands into the auto, steel and rare earths sectors, few companies are feeling the pressure more than top Japanese car parts supplier Daido Steel. The supplier to Honda Motor and other major marques is facing a trio of headwinds: a 50 per cent tariff on US imports of steel, a 25 per cent duty on foreign-made cars and a levy on parts, and China's tightening of exports of rare earths – minerals critical to make magnets for car motors. 'They have started putting up walls,' chief executive officer Tetsuya Shimizu said in an interview at Daido Steel's headquarters in Nagoya. 'This will have a massive impact on the stability of the global economy.' It's also having major implications for the sprawling network of speciality manufacturers that are critical to the global automotive industry and now find themselves stuck between feuding superpowers. For Daido Steel, the trade war has meant renewing a push to build rare earth supply routes outside of China, which accounts for almost 70 per cent of mined material and about 90 per cent of global refining of the metals. Some new routes are already starting to form, mainly from Australia, and Shimizu said there's potential in the US, Canada and Brazil. But progress has been slow due to high costs and low supply, he said, underscoring the immense challenge facing the world's efforts to wean from their dependence on China. BT in your inbox Start and end each day with the latest news stories and analyses delivered straight to your inbox. Sign Up Sign Up Daido's struggles also signal that the true toll of the trade war on the auto sector will be magnitudes more than the billions of US dollars forecast by top carmakers, including Ford Motor and Toyota Motor. And the constant of roller coaster of escalating, then de-escalating, tensions has left companies scrambling to maintain business ties under a cloud of uncertainty. When Trump initially imposed 25 per cent tariffs on steel imports in March, Shimizu was able to reassure clients in the US that business could continue as normal. Customers value Daido Steel's products enough to wait months for shipments to arrive and, if they could buy comparable goods domestically in the US, 'they'd already be doing it', he said. But his confidence vanished earlier this month when duties doubled. 'At some point, it stops making sense as a business,' Shimizu said. 'Asking customers to pare back orders or lean on inventory or lower production could negatively impact the entire enterprise, but that risk might be unavoidable.' Daido Steel earns most of its money supplying products to Japan's automakers, many of which sell cars in the US that are manufactured or assembled elsewhere. Collectively, the top Japanese auto brands are bracing for a US$19 billion hit from tariffs. Several Japanese carmakers have already started to shift or lower US production, leaving suppliers such as Daido Steel at the mercy of their customers' rapidly changing plans. In May, the steelmaker withheld full-year profit guidance for the current fiscal year and forecast a 34 per cent drop in first-half net income. 'It comes down to how carmakers respond,' said Mikine Kishi, general manager of the company's corporate planning department. 'If they decide they're not going to manufacture in Japan anymore, or that they will lower total production volumes, that would have an extremely big impact on our business.' The US and China appear to have reached a detente, and Trump has signed an order that prevents multiple tariffs from piling on top of each other. But rare earths are proving to be a particular sticking point in trade negotiations. China's export controls on seven individual elements, and magnets that contain even tiny amounts of them, left sectors from auto to defence urgently trying to find workarounds. Uncertainty over supply lingers, though Beijing said this month it's accelerating the review of rare earth export license applications and has approved some requests. Daido Steel had a head start in diversifying its supply chain. Back in 2010, China briefly imposed a de facto ban on exports of rare earths to Japan following a maritime dispute, kick-starting industry efforts to break their reliance on the nation. Success has been limited though: Japan depends on China for 60 per cent of its rare earths supply, down from 80 to 90 per cent. As well as seeking alternative supplies, Daido Steel focused on new technology to use fewer rare earths. One of the company's key products is a neodymium magnet that does not include heavy rare earths, including dysprosium or terbium, which has been used by Honda since 2016. Daido Steel also supplies magnets indirectly to automakers by way of Aisin and Denso, two of Japan's biggest suppliers. Daido Steel wants to expand production and industrial use of those magnets, betting that customers will increasingly look for non-Chinese supply. It also plans to build a manufacturing plant in the US, though Shimizu did not specify when or where that will happen. It would be a major disappointment if the US should slide into authoritarianism, Shimizu said, because that would mean the global economy will eventually have to revolve around America. 'I'm not sure there's enough time for supply chains to transition if the goal really is to produce everything in America for America,' he said. BLOOMBERG
