A survey projected there were 414,000 millionaires at the end of 2007 in Hong Kong, and the majority of them owe their upgrade in financial status to the booming stock market.

Commissioned by Citibank, the City University of Hong Kong interviewed 4,029 adults in October and November 2007.

The survey shows the number of people with liquid assets worth more than HK$1 million increased to 414,000, much higher than 276,000 in 2006.

Each of these millionaires owns on average HK$9.9 million in assets.

The flourishing stock market in 2007 has created many millionaires, said Weber Lo, chief executive officer & country business manager at Citibank Global Consumer Group.

Over the past year, 228,000 people have become millionaires, a strong 97 percent increase compared to 116,000 in 2006.

"Many people have turned into millionaires overnight because of the thriving investment market," he explained.

Eighty-one percent of these millionaires said they have invested in the stock market.

While it's easy to make money in stock markets, it's equally easy to lose the money.

In January and February when the stock market slumped, another 335 people were interviewed.

The projected number of millionaires has dropped from 414,000 to 350,000.

"All the gains in stock markets will only be a dream if people do not know how to manage their wealth," he said.

"Long-term wealth management and investment diversification are something that we should learn," he said.

Despite recent fluctuations in the stock market, Lo expected the number of millionaires to remain at the 350,000 level this year.

The majority of millionaires are locals (81 percent) and 15 percent are mainland migrants.

Among these mainland-born millionaires, 84 percent accumulated wealth after they came to Hong Kong.

"This shows that Hong Kong, as a good financial center, offers many good wealth management services and investment opportunities for migrants from the mainland," Lo noted.

The survey also shows that people with relatively more money (HK$2 million or above) are more willing to diversify their assets.

This year Wanchai remains the district where the most millionaires can be found (16.9 percent).

Central & Western district comes second (16.3 percent) and Eastern district comes third (15.4 percent).

About two-thirds of the millionaires are among the work force, with most working in financial institutions (19.6 percent), insurance & real estate (12.3 percent) and civil service (11.6 percent).

Associate professor of Finance & Decision from the Hong Kong Baptist University Billy Mak agreed that stock investment has increased liquid assets for many in 2007.

Many people also got a lot of cash after selling their properties between August and the end of last year, he said.

However, he said the projection of more than 400,000 millionaires in Hong Kong is quite hard to believe.

(HK Edition 03/28/2008 page1)