The number of rich people in Hong Kong slumped 17.4 percent last year due to the volatile stock market which resulted in the evaporation of a great portion of the group's wealth, according to the latest Asia-Pacific Wealth Report 2012 released on Wednesday.

HK's wealthy people number shrinks.[File photo]

Average wealth among the so-called High Net Worth Individuals (HNWIs) in the city also decreased by about 20.1 percent with a big proportion even dropping out of the rich group bracket, according to the report prepared by Capgemini and RBC Wealth Management, which defined wealthy individuals as those with investable assets of $1 million or more.

As a majority of wealthy individuals in Hong Kong have poured too much money into the city's stock market, the dismal performance of the market resulted in substantial losses in the group's wealth, Simon Ng, an investment head with RBC Wealth Management, explained during a media briefing on Wednesday.

The city's benchmark Hang Seng Index slumped over 4,600 points or 20 percent throughout 2011.

However, the rich population in the Asia Pacific region grew by 1.6 percent to reach 3.37 million last year despite the headwinds, which for the first time has surpassed the number in North America, according to the report. Increases were mainly seen in Thailand, Indonesia and the mainland, where the number of rich population had grown by 12.8 percent, 8.2 percent and 5.2 percent, respectively.

The report also shows that Japan, the Chinese mainland and Australia are the places where most of the rich population lived, accounting for 76.1 percent of the total HNWIs in the region compared with 74.4 percent in 2010. The group's total wealth, nevertheless, dropped 1.1 percent to $10.7 trillion in 2011, said the report.

It also finds that offshore wealth centers in the region, led by Hong Kong and Singapore, are becoming increasingly favored destinations by the wealthy groups all over the world.

But the excessive concentration of wealth has also become a social issue within the region. In Hong Kong, the Gini Index — a internationally applied measure of income disparity — has been moving up over the past 10 years, hitting 0.537 in 2011 over 0.525 in 2001, representing a severer unequal wealth distribution situation in the city, according to government figures released in June.

The wealth report released on Wednesday also showed that entrepreneurship remains a major wealth driver in the region, accounting for more than half of the wealth owned by the rich in Asia.

"As emerging economies progress, entrepreneurs who can establish or invest in businesses focused on improving the wealth of society will be well-positioned to grow their investable wealth," said George Lewis, group head of RBC Wealth Management, who added that industries such as financial services, education, healthcare, and value-added manufacturing, will lead the next wave of HNWI wealth.

In face of economic challenges including the Euro-zone crisis, the slumping overseas demand and myriad domestic challenges, Asian economies will continue to encounter high inflation and other unfavorable global factors. But the diverse nature of Asia-Pacific exports and economies also means the regional outlook as a whole remains strong. The report also predicts that the Asia-Pacific economies, excluding Japan, are expected to expand by 6.1 percent in 2012 and 6.6 percent in 2013, driven by the Chinese mainland and India.

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