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Wealth in Indonesia: Sizing the Market Opportunity 2016

Summary

The Indonesian affluent market is small but is set for continuous strong growth. Indeed, the proportions of HNW and mass affluent individuals compared to its overall size are unremarkable, and it is only the strong growth rates that are predicted that make the market so attractive. Deposits account for a lower proportion than the regional average, while bonds continue to flourish. Outside of the onshore liquid market, local HNW individuals show strong appetite for property investment, while concerns about economic stability have pushed investors to hold assets offshore. However, the election of President Joko Widodo late in 2014 brings stability and optimism, and the recent passing of a tax amnesty is expected to make significant amounts available for government spending.

Key Findings

- Indonesia's large and fast-developing economy is driving growth of retail assets. While the market is relatively small considering that Indonesia is the fourth most populous nation in the world, its growth rates have been impressive and look set to continue (albeit at a more moderate pace) going forward.
- Take-up of pro-cyclical investments such as equities and mutual funds remains low, and deposits remain by far the preferred choice despite recent interest rate cuts.
- The Indonesian affluent account for only a tiny proportion of the total population, but are growing in number. As of 2015 Indonesia's high growth rate has resulted in an affluent population of 1.2 million, and this is expected to expand to 1.75 million by 2020.
- HNW individuals are yet to embrace more complex alternative products, with 94% of HNW onshore wealth held in cash. The remaining 6% largely goes into property investments (either directly or funds), but a healthier outlook for commodities may encourage interest in more sophisticated wealth management products from local providers in this space going forward.


Synopsis

Verdict Financial’s “Wealth in Indonesia: Sizing the Market Opportunity 2016” analyzes the Indonesian wealth and retail savings and investments markets, with a focus on the HNW segment. The report is based on our proprietary datasets.
Specifically the report:
- Sizes the affluent market (both by the number of individuals and the value of their liquid assets) using our proprietary datasets.
- Analyzes which asset classes are favored by Indonesian retail investors and how their preferences impact the growth of the overall savings and investments market.
- Examines HNW clients’ attitudes towards non-liquid investments such as hedge funds, property, and commodities.
- Identifies key drivers and booking centers for offshore investments by Indonesian HNW clients.


Reasons To Buy

- Benchmark your share of the Indonesian wealth market against the current market size.
- Forecast your future growth prospects using our projections for the market to 2020.
- Identify your most promising client segment by analyzing penetration of affluent individuals in Indonesia.
- Evaluate your HNW proposition by understanding the investment mix of the local onshore investment market.
- Review your offshore strategy by learning HNW motivations for offshore investments and their preferred booking centers.