According to the latest report by Knight Frank in 2021, there are currently over 47,000 millionaires in Malaysia. The report revealed that the number of millionaires in Malaysia had increased by 1.6% in 2020, despite the economic challenges posed by the COVID-19 pandemic. This figure has been steadily increasing in recent years and is projected to surpass 130,000 in the next five years, provided that the Malaysian economy continues its robust growth.
Based on the Knight Frank Wealth Report, a person is defined as a “high-net-worth individual” (HNWI) if they have a net worth of at least USD 1 million (equivalent to RM 4.1 million), excluding the value of their primary residence.
HNWIs in Malaysia have predominantly amassed their wealth through entrepreneurship and inheritance, with the former accounting for 40% of the total and the latter making up 30%. In addition, other sources of wealth for HNWIs in Malaysia include real estate, finance, and manufacturing. However, it is noteworthy that the most common industries for HNWIs in Malaysia are property, retail, and manufacturing.
Factors that have contributed to the increase in the number of millionaires in Malaysia
There could be several other external factors that have contributed to the increase in the number of millionaires in Malaysia. Some possible factors include
- Rebound in the stock market: The stock market is an important indicator of economic performance and growth. When the stock market performs well, it can lead to an increase in the value of investments held by individuals, including HNWIs. In 2020, the Malaysian stock market saw a rebound after the initial impact of the COVID-19 pandemic, which helped to boost the net worth of many investors.
- Strong demand for technology and healthcare stocks: The technology and healthcare sectors have been among the fastest-growing sectors in Malaysia in recent years. HNWIs who invested in these sectors may have benefited from the strong performance of technology and healthcare stocks.
- Rise in initial public offerings (IPOs): IPOs occur when a company issues shares to the public for the first time, allowing investors to buy shares in the company. In 2020, there were several high-profile IPOs in Malaysia, including the IPO of glove manufacturer Top Glove, which was the world’s largest IPO that year. HNWIs who invested in these IPOs may have benefited from the increase in the value of their investments.
- Economic stability and growth: Overall economic stability and growth can also contribute to the increase in the number of HNWIs. When the economy is stable and growing, it creates a favourable environment for investment, which can help to boost the net worth of individuals. In recent years, Malaysia has enjoyed relatively stable economic growth, which may have contributed to the increase in the number of millionaires in the country.
Additionally, it’s worth noting that Kuala Lumpur is among the top cities in the Asia-Pacific region in terms of the number of ultra-high-net-worth individuals (UHNWIs), who are defined as those with a net worth exceeding USD 30 million.