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Billionaires prefer cash
Material posted: Publication date: 28-08-2016
Billionaires massively convert their assets into cash, the report says research company Wealth-X. In the foreign exchange markets is now easier to earn than the stock.

The aggregate state of the world's billionaires rose to almost 7.7 trillion dollars, said the report by research company Wealth-X. the tendency to get rid of investments in any assets and the transfer condition in cash and equivalents retained, it is noted in the census of billionaires in the world."

According to the company, the number of people with a fortune of $ 1 billion and above in the world in 2015, an increase of 6.4%, with the total number reaches 2473 people. The General condition of the billionaires analysts at the end of 2015 was estimated at 7,683 trillion dollars, a record for the time of the preparation of the Census. Compared to the previous year, the total capital of billionaires grew by 5.4% and exceeded the size of GDP of all countries of the world except the USA and China.

The most successful last year was for Asia (excluding Middle East) — the number of billionaires there rose by 15.2%, which is almost five times exceeded the growth rate of this indicator in North America. As a result, the Asia came in second place for number of residents with wealth from USD 1 billion in the world, the total number of billionaires in the region has risen to 645 people against 628 in North America.

Thus every fifth dollar of state were invested in cash and were on Bank deposits. This trend emerged in 2012, and since then has only accelerated: billionaires money, including from securities from investments in real estate and business. The reason - overestimation of the value of shares worldwide as well as the uncertainty in the global economy".

Wealthy people really do listen to trends in the global and local economies and, if they moved, say, 50% or more of its assets in cash, it could say that the sold their assets were at the peak value, and that the financial markets are waiting for a new collapse, says the analyst of "ALOR Broker" Kirill Yakovenko. In the crisis period are generally good to have cash, as many assets, including real estate, can be bought with a significant discount.

According to experts, the fact that the investigated billionaires every fifth dollar held in cash, does not mean that the markets are waiting for new shocks, but rather speaks about the investment preferences of the major players. The difference in interest rates between developed and developing countries now makes it possible to make good money on the transactions of carry-trade, and for large capital is one of the most popular ways nearly risk-free investment. Simplistically, it looks like the loan is taken in foreign currency with a low interest rate, the money converted into the currency with a high interest rate and are placed on Deposit. The difference may result to be 1-1. 5%, but such arbitration is very convenient for large amounts that are difficult to apply anywhere else.

From the point of view of the economy, says Yakovenko, this means increased volatility in the currency markets that we observe on the example of the ruble, which at the time lost correlation with the price of a barrel of oil was moving independently. Also, in 1-2 years this trend will lead to further stratification of society by income, as the wealthy are at the lowest price to buy property and other assets from people who have lost their jobs or business. The bundle will have far-reaching consequences, including social conflict. The expert emphasizes that the billions of dollars often exist not in themselves, but in conjunction with the policy, so their behavior often does not reflect the intentions of their owners or economic trend, and illustrates the pressure of their political environment.

But do keep about 5% in the money - a normal tactic major Fund, says Georgy Vashchenko, head of operations on the Russian stock market IR "freedom Finance". There is nothing unusual. In the quiet years the figure varies slightly. The real economy does not suffer from such movements of capital.

Alarming signal for the market, he said, would funds deleveraging (selling assets to reduce leverage). It can begin in the case of a rate hike in the United States. Traditional assets (real estate, etc.) and more conservative investors portfolios will change the structure of portfolios in favor of instruments such as deposits, Treasury bills, etc. But it will occur not earlier than the end of the year.

Anna Koroleva


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