Several well-established affluent families in Hong Kong are grappling with the repercussions of China's economic slowdown, with four out of five among the 20 wealthiest Asian clans experiencing a decline in their fortunes over the past year, according to the Bloomberg Billionaires Index.
The financial decline is attributed to challenges in the city's stock market and exposure to China's ongoing property crisis. Despite this, the collective wealth of the region's richest families has surged to USD 534 billion, up by USD 55 billion since March. The growth is attributed to India's robust economic expansion, benefiting prominent families like Ambani, Mistry, Jindal, Birla, and Bajaj. The shift underscores changing wealth dynamics as China's growth slows, with India now emerging as a significant player, reported Bloomberg.
In a notable shift, Indian families, including Ambani, Mistry, Jindal, Birla, and Bajaj, have seen substantial gains, contributing to the overall increase in wealth. This is exemplified by India's stock market surpassing Hong Kong's, marking a departure from the longstanding dominance of China in the region's economic landscape.
India became 4th largest stock market surpassing Hong Kong
Recently, according to Bloomberg, the Indian stock market has surpassed Hong Kong to secure the fourth position among the world's highest equity markets. As of the close on January 22, the total value of shares listed on Indian exchanges stood at USD 4.33 trillion, edging ahead of Hong Kong's USD 4.29 trillion, as per Bloomberg's data.
Hong Kong's Old-Money Families Navigate Economic Challenges
China's economic slowdown is reshaping wealth distribution, with no mainland families ranking in the top 20 for the first time since 2020.
The repercussions of this economic recalibration are evident in the Cheng family of Hong Kong, whose USD 23.6 billion fortune has declined by USD 2.4 billion over the past year. The family, with roots tracing back to a jewelry shop established almost a century ago, faces challenges as their flagship company, New World Development Co., experiences a slump in its stock value. The company, burdened with higher leverage than its peers, undertook a USD 3 billion acquisition deal last year to stabilize its finances, said Bloomberg report.
As the Cheng's navigate this economic downturn, the family's patriarch, Henry Cheng, has disrupted assumptions about succession within the family empire. Despite earlier expectations that his son Adrian would take the helm as CEO, Henry announced in November that he is still searching for a successor. He hinted at the possibility of different family members leading distinct businesses or even considering external hires. While this strategy can be a sound succession plan, experts caution that it may unleash forces of fragmentation within the family business.
Other Asian countries
Turning to other Asian countries, in Indonesia, the Hartono family, founders of the Djarum cigarette brand, has diversified its wealth through investments in Bank Central Asia. Thailand's Chearavanont family, originating from a seed shop in 1921, leads the Charoen Pokphand Group, a conglomerate with interests in food, retail, and telecom. The Yoovidhya family in Thailand, credited with the success of Red Bull, has seen its fortune soar through the global popularity of the energy drink.
Wealth Surge in India
Prominent Asian families, such as the Ambani's in India, who have successfully navigated generational transitions. In contrast to the Cheng's, the Ambani family's fortune has expanded significantly under the leadership of Mukesh Ambani, who heads the Mumbai-based conglomerate Reliance Industries. Mukesh's children are actively involved in different business units, showcasing a well-managed generational transition.
The Birla family, a prominent name in India's business history, traces its roots back to the 19th century, and its current chairman, Kumar Mangalam Birla, oversees a diverse portfolio spanning metals, financial services, and retail.
The Mistry family, associated with the Shapoorji Pallonji Group, faces liquidity challenges as the majority of their wealth is held in Tata Sons. This limitation restricts their ability to sell stakes, contributing to the complexities of their financial situation.
The Jindal family, represented by the late Om Prakash Jindal, started a single-unit steel plant in 1952, which has since grown into the OP Jindal Group, a conglomerate spanning steel, energy, cement, and sports. The family continues to manage the businesses, facing opposition in their plan to develop a USD 2 billion iron-ore mine in South Africa.
The Bajaj family, known for their contributions to India's business landscape, has seen its fortune impacted by the country's economic dynamics.
