The South Korean Wealth Market 2006: Industry Report

The South Korean Wealth Market 2006

Product Type: Market Research Report
Published by: Datamonitor
Published: December 2006
Product Code: R313-18954

Description

Introduction
The South Korean Wealth Market 2006 is Datamonitor’s guide to the affluent wealth landscape in South Korea. Following the popularity of Datamonitor’s recent research in the Indian and Chinese markets, the report explores one of the less high-profile emerging wealth markets in the Asia-Pacific region.

Scope
Data was collected directly from governmental sources such as central banks, mutual fund associations and stock exchanges.

Insight into the respective financial services market was obtained through primary interviews with the main wealth managers and private bankers.

Sizing and forecasting of high net worth individuals were generated by Datamonitor's proprietary Global Wealth Model.

Report Highlights
Citigroup Private Bank is seen as a big threat in the Korean market. The bank has a team of local Korean private bankers, which is important in the market. However, Citibank’s strength lies in combining this local team with its international network and subsequent access to a wide range of diverse products and services.

In 2005 investors were selling their equity holdings to purchase property because of rapidly spiraling house prices. At the beginning of 2006 Korea Investment and Securities said that the investment pattern was ill advised and could be disastrous for the balanced investment portfolio as property prices had already approached their peaks.

Foreign banks will have to contend with the fact that the domestic banks are using aggressive pricing tactics, which will make any growth very difficult - especially if the banks want to do it in a profitable way.

Reasons to Purchase
Find out why South Korea is an attractive market and its advantages over other emerging economies.

Find out how large the market is now and how large it will be in 2010

Find out how big the gaps are and what the opportunities for growth will be going forward

Table of Contents

TABLE OF CONTENTS

CHAPTER 1 INTRODUCTION 9

What is this report about? 9

Who is the target reader? 9

How to use this report 9

CHAPTER 2 MACROECONOMIC OVERVIEW 11

Market comparisons 11

The four economies 11

Inflation and consumer prices 14

Population and unemployment 15

CHAPTER 3 THE SOUTH KOREAN WEALTH MARKET 18

Market background 18

Savings and investments 18

Size of the affluent market 19

Financial services and the regulatory environment 24

Financial sector restructure 24

Competitive dynamics 26

Commercial banks 26

Private/ premier banking and wealth management 27

Developments in 2006 28

July 2006 - UBS acquires a stake in Korean asset manager 28

August 2006 - Standard Chartered bullish on market share 29

Future focus 30

The affluent outlook 30

CHAPTER 4 APPENDIX 33

Data 33

Definitions 38

AAGR 38

Affluent 38

CAGR 38

Gini index 38

Liquid assets 39

Liquid asset bands 39

Research methodology 40

The Global Wealth Model 41

The UK sub model 41

Asia-Pacific sub model 41

Forecasting methodology 41

Datamonitor’s wealth numbers compared with others’ numbers 42

Bespoke Wealth Market Sizing 43

Further reading 44

Datamonitor Asia-Pacific Wealth Reports 44

Datamonitor Asia-Pacific Insight Reports 44

Datamonitor Global Wealth Service: Competitor Tracking 44

Asia-Pacific contacts 45

LIST OF TABLES

Table 1: Sectoral breakdown of GDP in Malaysia, Thailand, South Korea and Taiwan, 2005 33

Table 2: Indexed GDP growth, 1999=100 33

Table 3: TypeTableTitleHere 33

Table 4: Consumer Price Indices of Malaysia, Thailand, South Korea and Taiwan, 2000-2005 34

Table 5: Rate of unemployment in Malaysia, Thailand, South Korea and Taiwan, 2000-2005 34

Table 6: Population breakdown by age in Malaysia, Thailand, South Korea and Taiwan, 2005 34

Table 7: South Korean retail savings and investments, 2000-2005 35

Table 8: Onshore liquid wealth owned by individuals in South Korea, 2001-2005 35

Table 9: Number of affluent individuals in South Korea, 2001-2005 36

Table 10: Onshore liquid wealth owned by individuals in South Korea, 2006-2010 36

Table 11: Number of affluent individuals in South Korea, 2006-2010 37

Table 12: Wealth markets that have been modelled using the Global Wealth Model 43

LIST OF FIGURES

Figure 1: Report structure and research model 10

Figure 2: A sectoral breakdown of the four economies reveals varying reliance on the services sector, with Taiwan’s economy being the most reliant 12

Figure 3: South Korea’s economy grew at the fastest overall rate between 2001 and 2005 13

Figure 4: South Korea’s economy is by far the largest of the four and saw good average annual growth over the 2001-2005 period 14

Figure 5: All four economies have seen low inflation of consumer prices over the 2000-2005 period 15

Figure 6: Of the four countries Malaysia has the youngest population profile 16

Figure 7: All four countries have low unemployment on a global scale, with Thailand’s rate the lowest in 2005 17

Figure 8: Retail savings and investments growth flattened out in 2003, but the market did not see a major dip as other countries did 19

Figure 9: Individuals with between USD60,000 and USD500,000 in investible assets grew to more than 1.6 million in 2005 21

Figure 10: The number of high net worth individuals in South Korea dipped in 2003 before growing in 2004 and 2005 22

Figure 11: Typical diversified investment portfolio of a Korean individual with more than USD10m, as provided by Korean wealth managers, 2006 23

Figure 12: Commercial banks in South Korea fall into three categories, Nationwide Banks, Local Banks and Foreign Bank Branches 26

Figure 13: Mass affluent individuals with between USD60,000 and USD500,000 will own 50% of all retail liquid assets in 2010 30

Figure 14: The number of individuals with between USD60,000 and USD500,000 in investible assets will grow by more than 30% between 2005 and 2010 31

Figure 15: The overall liquid wealth of affluent individuals will grow at a rate of 6.4% compounded annually over the 2005-2010 period, not a great deal fasted than overall retail liquid wealth 32

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