The stock market is one of the most important financial markets which has a close relationship with a country’s economy, which is often called the barometer of the economy. The role of Asia’s stock markets as essential drivers of growth in the region is underappreciated. Probably unknown to many, the share of stock market capitalization as a percentage of GDP in most Asian countries is comparable to their total banking sector assets, with debt securities markets coming a distant third. In contrast, the banking sector dominates financial intermediation in many advanced countries.
As per data from the World Federation of Exchanges, below are the top 10 Asian stock exchanges:
• Shanghai Stock Exchange, China
• Tokyo Stock Exchange, Japan
• Hong Kong Stock Exchange, Hong Kong
• Shenzhen Stock Exchange, China
• Bombay Stock Exchange, India
• National Stock Exchange, India
• Korea Exchange, South Korea
• Taiwan Stock Exchange, Taiwan
• Singapore Exchange, Singapore
• The Stock Exchange of Thailand, Thailand
“It’s possible that Asian stocks outperform their global peers” as regional economies should start to see more significant benefits from higher levels of vaccinations and reopenings, said David Chao, global market strategist for Asia Pacific ex-Japan at Invesco. An export growth downturn is expected to begin in mid-2022, reflecting three factors: first, spillover effects from a slowing China – Asia’s exports to China are equal to its total exports to the US and Europe combined; second, pent-up demand for goods from developed markets will likely fade; and third, a moderation in the tech cycle. In 2022, headline CPI inflation across Asia is expected to rise to 3.0% y-o-y from 2.1% in 2021, but this is still within central bank targets or historical averages. Lower inflationary pressures, reflecting a weaker demand recovery in Asia, should support gradualism in monetary policy normalization.
“One of the biggest problems is that finding a dissenting voice on the global procession to recession is increasingly rare. The negativity about the economy is pervasive, and that alone can keep stock pickers sidelined," Stephen Innes of SPI Asset Management said in a commentary. According to top investment banks, geopolitical tensions worldwide have risen, but Southeast Asia’s markets may offer relative safety to investors. Bloomberg Intelligence 2022 predicts
China’s online retail sales growth to slide below 10% and Southeast Asia’s digital economy to grow 25-30% in 2022, beating the 20% predicted by Google, Temasek, and Bain & Co. BANGKOK (AP) - Shares were mostly higher in Asia on April 19, 2022, despite growing worries over the risks of recession as prices push sharply higher while economies are still recovering from the impact of the pandemic.
Most significant markets advanced though Hong Kong declined, weighed down by worries over Chinese property developers and regulatory crackdowns on technology companies. Rising prices for energy and food are adding to the concerns over how central banks will bring inflation under control without hindering a revival of business activity following the doldrums brought on by efforts to defeat coronavirus outbreaks. The conflict in Ukraine, which has added to those price pressures, showed no signs of easing as Russia launched a long-feared, broad ground offensive Monday, seeking to take control of Ukraine’s east.
Beijing has set national policy targets to be self-sufficient in the 5G semiconductors and renewables sector. China is also striving to improve its manufacturing quality by enhancing robotics. AllianzGI believes this shows that Chinese manufacturers can increasingly win market share from their foreign competitors. Financial services companies will also benefit from the ongoing liberalization of China’s capital markets and improved market infrastructure.