Published November 3, 2008

Super rich suffer paper losses in October rout

By CHEW XIANG

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(SINGAPORE) Around the world the absurdly wealthy got badly bloodied in October's market freefall, with paper losses in the hundreds of billions after their companies' stock prices plummeted.

A few billion poorer: Bill Gates lost US$3.2 billion in the value of his Microsoft shares; Warren Buffett could have lost US$5.29 billion based on his 350,000 Berkshire shares; Lakshmi Mittal may have lost US$50 billion on paper since May; and Li Ka-shing's wealth just about halved in October to US$14 billion

In the US, shares lost US$2.5 trillion in October, according to the Dow Jones Wilshire 5000 Composite Index, which tracks almost all actively traded stocks there. It's the worst drop since October 1987, when Black Monday saw the Dow Jones Industrial Average lose 22.6 per cent in a day.

In India, the Sensex lost 23.9 per cent through October; Shanghai was down 24.6 per cent, and Japan's Nikkei dropped 23.8 per cent. Hong Kong fell 22.5 per cent, while the Straits Times Index shed 24 per cent.

Not surprisingly, the world's richest people became a lot poorer over the month.

Billionaire Bill Gates lost US$3.2 billion in the value of his Microsoft shares, taking his worth down to just under US$18 billion. This includes only the nominal value of his holdings in the software giant.

Fellow American billionaire Warren Buffett saw the share price of his investment holding company Berkshire Hathaway drop US$15,110 over October to a still-healthy US$115,490 per share for the month. This meant a US$5.29 billion loss based on his 350,000 Berkshire shares.

Earlier last month, Forbes Magazine said Mr Buffett had overtaken Mr Gates as the wealthiest American, based on share price movements in September. It said that while 17 billionaires on Forbes' list lost more than US$1 billion in that month, Mr Buffett managed to increase his worth by US$8 billion to US$58 billion.

In the same month, Microsoft founder Mr Gates saw his fortune fall to US$55.5 billion from US$57 billion, according to Forbes' calculations. He had been ranked top of its American rich list for 15 years.

Elsewhere, the world's second richest man Carlos Slim, whose telecommunications empire gave him a net worth estimated at US$58 billion at end-September, lost US$20 billion in the first three weeks of October, according to CNBC.

ArcelorMittal's Lakshmi Mittal, who along with his family owns 623 million shares, or 43 per cent, of the steel giant, may have lost US$50 billion on paper since May, according to reports from India.

In October, ArcelorMittal's share price fell over 40 per cent to just over 20 euros on several European exchanges, valuing his holdings at about 12.5 billion euros (S$23.5 billion) - down 9.5 billion euros in just four weeks. The company is listed in Amsterdam, Brussels, Madrid and Paris, as well as New York, where it last traded at just over US$26.

Closer to home, Hong Kong tycoon Li Ka Shing's wealth just about halved in October, based on his holdings in Canadian energy company Husky Energy, Hong Kong's property giant Cheung Kong Holdings and flagship conglomerate Hutchison Whampoa.

Mr Li may be worth about US$14 billion now, compared to about US$26 billion at end-September, as Husky has seen its share price fall from C$44.20 at the start of the month to C$36.20 last Friday. Cheung Kong and Hutchison Whampoa closed the month 15 and 30 per cent down respectively.

In Singapore, Kwek Leng Beng and family may have lost S$780 million from their holdings in property firm City Developments through Hong Leong Holdings, Hong Leong Investment Holdings and Hong Realty - collectively worth S$2.7 billion when October began.

On Friday, City Development shares traded at S$6.30, down from S$8.79 at the start of October. Mr Kwek and his family were estimated to be worth US$1.2 billion when Forbes magazine published its latest Singapore rich list in August.

Veteran banker Wee Cho Yaw lost almost S$1 billion in the month after his flagship United Overseas Bank lost 22.5 per cent in October to S$13.02. He is now worth about S$3.2 billion, down from more than S$4 billion.