Sharp Drop in Number of Israeli Millionaires


israeli-currencyInvestment Bank Merrill Lynch and Capgemini’s World Wealth Report for 2008 shows that 2,300 of Israel’s richest residents lost a great amount of their total wealth and are no longer defined as “millionaires.” According to the survey, published for the 13th year in a row, 5,900 millionaires live in Israel today compared to 8,200 in 2007. The total value of Israeli millionaires’ wealth in 2008 was $30.1 billion, a 19.5% drop compared to the previous year.

The report also reveals that while the number of people with more than $1 million in net assets fell 14.9%, the number of millionaires in Israel dropped by an almost double rate of 28%.A millionaire is defined as a person people with net assets of more than $1 million excluding their main home and everyday possessions. The report ranks an ultra-rich as a person with at a fortune of more than $30 million.

According to Merrill Lynch, the number of ultra-rich in Israel dropped from 97 to 73 in the past year – down 24.6%.

“The drop in the number of millionaires in Israel stems, among other things, from the heavy losses suffered by wealthy people from investments both in Israel and abroad, and due to the collapse in global capital markets,” explains Sigal Shapira, director of Private Banking at Merrill Lynch.

“The erosion in industries like real estate also created a negative effect on the profits of those investors, some of whom were forced to write off debts due to failed investments.”

According to Shapira, “The losses in the financial markets alongside losses in other industries forced investors to take a more cautious policy. The result was that after realizing the investment, often at a significant loss, the millionaires preferred to move to a standby position, and are waiting to enter an investment if and when they feel the markets have reached a haven of rest.”

The study showed that the world’s rich lost a fifth of their wealth in 2008 and the number of people with fortunes of more than $1 million fell 15% as the financial crisis wiped out two years of growth.

The total value of the world’s wealthy dropped below 2005 levels to $32.8 trillion. Nearly 35% of that wealth belongs to so-called ultra-rich people, who account for 0.9% of the rich population. In 2008 the number of ultra-rich people and their value dropped by nearly a quarter.

The United States, Japan and Germany are home to 54% of the world’s rich, and this year China surpassed Britain and now has the fourth largest rich population. Rounding out the top 10 are France, Canada, Switzerland, Italy and Brazil.

The United States saw an 18.5% drop in its rich population, but it still remains No. 1 with 29%, or 2.5 million, of the world’s rich. Japan’s rich population fell 10%, but Germany lost only 2.7% of its wealthy.

{Ynet/Yair Newsenter}