Hong Kong will continue to stay ahead of Singapore in terms of its number of millionaires and the assets they hold, according to a recent report by London-based market research firm Datamonitor.

The number of Hong Kong millionaires will increase by 8.8% annually to 83,000 in 2011 from 51,000 in 2006. In Singapore, that number will increase by 7.3% annually to 29,000 millionaires in 2011 from 19,000 in 2006.

Assets held by Hong KongÆs millionaires are expected to expand by an average of 11% annually to nearly $250 billion from $150 billion over the same period, while those held by SingaporeÆs millionaires are expected to grow by an average of 9% annually to $85 billion from $55 billion.

Both Hong Kong and Singapore have made a big push over the past few years to develop their respective financial markets and attract more international players in the finance and asset management industries to set up operations in their respective jurisdictions. For new entrants to Asia, Hong Kong tends to be their gateway to Greater China while Singapore tends to be their link to the rest of Southeast Asia.

David Lalich, a Sydney-based financial services analyst at Datamonitor, says Hong KongÆs ability to rebound quickly from economic setbacks is one major reason it continues to stay ahead of Singapore in terms of the wealth generation capabilities of its residents.

ôHong Kong seems to be able to recover from adverse economic events better than Singapore,ö Lalich says, noting that was the case during the global economic downturn in 2001-2002 and the SARS outbreak in 2003.

Another factor is interest rates. Although interest rates are declining in Hong Kong at the moment, in line with lower interest rates in the US, they will likely be on an upward trend overall in the next five years, Lalich says. ôThat will make Hong KongÆs deposit and bond markets more attractive.ö

SingaporeÆs long term interest rates are likely to remain constant or decline slightly over the next five years period, he adds.

Population is also likely a factor. Hong KongÆs latest official data shows it has a population of around 6.9 million, while SingaporeÆs latest available data shows it has 4.7 million.

Datamonitor considers individuals holding $1 million or more in onshore liquid assets including cash and deposits, equities, bonds and unit trusts as millionaires.