China’s richest people just lost over S$100 billion in a month

BEIJING — It takes an iron stomach to be one of the richest people in China.

Billionaires from China and Hong Kong who rank among the 400 wealthiest people on earth gained $121 billion this year through June 12, 2015, when equity markets peaked there. They lost almost US$100 billion (S$135 billion) as shares plummeted this month, including US$30 billion at the start of the week, before the rally on Thursday and Friday.

“I hope these people realise that it’s just paper money,” said Mr Niklas Hageback, who helps oversee about US$202 million at Hong Kong-based money management firm Valkyria Kapital. “I hope for their own personal mental health that they have been able to realize that. Otherwise, if you just start to look at your own income statements, the losses are truly horrendous.”

The rise and fall (and potential rise again) has reshuffled the top echelon of global wealth, pushing the world’s most-populous country above all others except for the United States in the numbers of billionaires created and the fortunes they control.

There are 26 billionaires from mainland China who have a combined US$262 billion, about 6 per cent of the US$4.1 trillion held by the world’s 400 richest people, according to the Bloomberg Billionaires Index. Two years ago, they numbered 21 and controlled US$106 billion, or 3 per cent of the combined fortunes.

The biggest gainer in the region this year is China’s richest person, Mr Wang Jianlin, who’s added US$12.4 billion to his fortune. The biggest fall belonges to Mr Robin Li, who’s down US$2.9 billion.

No fortunes illustrate the whipsaw better than those of Mr Pan Sutong, the Chinese-born chairman of Hong Kong-based conglomerate Goldin Group, and China’s richest woman, Ms Zhou Qunfei, chairman of consumer electronics supplier Lens Technology Co Ltd. At the start of the year, Mr Pan had a fortune of US$3.7 billion. Goldin Financial Holdings and Goldin Properties Holdings soared in early 2015, pushing his fortune to more than US$25 billion in May. Most of that gain was wiped out a month later. He has US$4.0 billion today.

Ms Zhou’s fortune surged with the IPO of Lens Technology in March. In the following two months, the stock rose by more than 500 per cent, adding more than US$10 billion to her fortune and making her one of China’s ten wealthiest people in the process. She lost nearly US$5 billion, or close to 40 per cent, of her fortune in June.

The roller coaster rides reflect the extent to which the fortunes in the region are tied to volatile public exchanges. The 38 billionaires have 66 per cent of their wealth in assets that trade publicly, according to the index. Billionaires in the US and Western Europe have less than half of their fortunes tied directly to public shares, according to data compiled by Bloomberg.

“In a five year scheme, this is just a hiccup,” Mr Hageback said. “It’ll be a dent on a longer-term chart, but it won’t be more than that.”

Surging markets increased the value of the biggest fortunes in China and Hong Kong by more than a third in the first half of 2015. And while the July meltdown has eroded more than half of those gains, the 38 richest were by 16 per cent year-to-date through Thursday. The 103 richest in Western Europe rose 4 percent in that period and the 127 richest in the US fell 1 per cent.

In mainland China it’s even more striking. There are 14 Chinese billionaires among the world’s 200 richest people with US$205 billion combined. Two years ago there were five with US$40 billion. The richest in Russia of that group have $173 billion down from $218 billion two years ago. The richest in Germany have remained flat at 15 billionaires with about US$174 billion. BLOOMBERG