The number of US-dollar millionaires in the SAR plunged 61.5 percent to 37,000 by the end of 2008, from 96,000 at the end of 2007 - the biggest drop anywhere in the world.

Hong Kong's wealthy are "particularly vulnerable" to large equity-market declines, the report said. Also, a "very large proportion" of Hong Kong's rich were at the bottom end of the wealth scale, with between US$1 million (HK$7.8 million) and US$5 million, and sank below the US$1 million mark after the financial crisis hit.

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The combined wealth of millionaires in the Asia Pacific region fell 22.3 percent during 2008 to US$7.4 trillion.

Meanwhile, China surpassed Britain to become the country with the fourth- largest number of millionaires, although the number of mainland tycoons fell 11.9 percent to 364,000. But the number of millionaires in Britain shrank 26.3 percent to 362,000.

"Over the next two to three years, we see China among the top three countries with high net worth individuals," said Arvind Sundaresan, head of Asia Pacific sales for Capgemini Financial Services.

Worldwide, the number of millionaires fell 14.9 percent during 2008 to 8.6 million, from 10.1 million at the end of 2007. Their total wealth plummeted 19.5 percent to US$32.8 trillion, from US$40.7 trillion. "The unprecedented declines wiped out two years of robust growth," the report said.

The ranks of the ultra-rich, who have investable assets of at least US$30 million, declined 24.6 percent to 78,000 people. The combined wealth of so- called ultra-high net worth individuals fell 23.9 percent.

The pinch felt in Japan was relatively mild, with the number of millionaires slipping only 9.9 percent. The number of high net worth individuals in the United States fell 18.5 percent to 2.46 million. "No region ended the year unscathed," said Francis Liu, Merrill Lynch Global Wealth Management's market managing director for Greater China.

The report predicted the combined wealth of the world's millionaires will rise at a compound annual growth rate of 8.1 percent over the next five years, hitting US$48.5 trillion by the end of 2013. The number of millionaires in Asia Pacific will surpass North America some time in 2012 or 2013, the report forecast.

The combined wealth of high net worth individuals in Asia Pacific will grow 12.8 percent annually through the end of 2013, while the wealth of North America's millionaires will grow at 7 percent a year, it said.

The annual report measures wealth on the basis of investable assets, excluding a person's primary residence.