Why investors should not overlook the Asian stock market

When it comes to investing in foreign stock markets, most eyes tend to turn westward—United States, Europe, and well-known markets that investors are familiar with. However, the noteworthy point is that the combined population of China and India accounts for 58% of the world. Meanwhile, the Asian stock market is demonstrating significant economic growth potential. Companies in this region can also generate higher investment returns than other regions, making it an opportunity not to be overlooked.

Asian Stock Markets—High-Potential Investment Areas

Asian stock markets are securities trading systems spread across multiple countries, covering Southeast Asia, East Asia, Hong Kong, and Taiwan. Investors can access these markets through various channels, whether through direct stock trading, mutual funds, or exchange-traded funds (ETF)

An important piece of information is that although Asian stocks make up only a small proportion of the global stock index (MSCI ACWI), the region accounts for 30% of the world’s GDP. This indicates there is still enormous growth potential.

Four reasons why this market is attractive:

1. Profit-making opportunities: Asia is a rapidly growing region. Stock prices in many countries are still at attractive levels, providing opportunities for investors to find high-potential companies.

2. Diversity of products: From technology companies in Hong Kong to industrial, materials, and financial sectors, there are many investment options.

3. Economic expansion: Dense populations, high-growth industries, and increasing demand for goods and services all drive market expansion.

4. Stability through diversification: Asian stock markets respond differently to global volatility, helping to reduce portfolio risk.

Global Stock Markets—Where Asia Fits

The top 10 largest stock markets in the world show that Asia holds significant figures:

It is evident that Asia comprises several large markets with values equal to or exceeding those of major Western markets.

Key Markets Investors Should Follow

Main Asian Markets

Japan: Tokyo Stock Exchange (TSE) is the primary investment hub of the country.

Hong Kong: Hong Kong Stock Exchange (HKEX) remains important despite being smaller than before.

China: Shanghai Stock Exchange (SSE) and Shenzhen (SZSE) are the two largest markets in Asia.

South Korea: Korea Exchange (KRX) reflects South Korea’s economic potential.

Secondary and Other Markets

India: Has two main markets: Bombay Stock Exchange (BSE) and National Stock Exchange (NSE), along with other secondary markets.

Taiwan: Taiwan Stock Exchange (TWSE) and Taipei Exchange (TPEx), plus secondary markets.

Malaysia: Bursa Malaysia (KLSE) is the main market.

Others: Indonesia, Singapore, the Philippines, and other ASEAN countries also have their own stock exchanges.

Major Asian Stock Indices to Know

Hang Seng Index (Hang Seng Index)

The main index of Asian stock markets in Hong Kong, composed of carefully selected stocks from the Hong Kong market, used to gauge market conditions and economic trends. The calculation involves aggregating the stock prices of qualifying companies and comparing them with historical data. Investors and market followers use this index as a primary performance indicator.

Nikkei 225 (Nikkei 225)

The main index of the Japanese stock market, called “Nikkei Stock Average” or “Nikkei 225,” includes 225 significant Japanese companies. It is used to measure the performance of the Japanese stock market and overall economic health. This index covers various industry groups, making it a good indicator of market and economic conditions.

Asian Stock Market Trading Hours Schedule

Investors need to understand opening and closing times, as foreign markets do not operate 24 hours. Most have specific trading hours, with the highest trading volume and activity during market open.

Asian Stock Market Opening Hours—By Local Time Zones

To help investors prepare, here are the opening and closing times by local time:

• Hong Kong (HKEX): Opens at 09:30, closes at 16:00
• Japan (TSE): Opens at 09:00, closes at 15:00
• China (SSE): Opens at 09:30, closes at 15:00
• South Korea (KRX): Opens at 09:00, closes at 15:30

When is the Best Time to Trade Asian Stocks?

Asian stock markets currently offer abundant growth opportunities, especially from the second half of 2022 through 2023. The main reasons include China’s easing of restrictions, monetary and fiscal policies supporting economic expansion.

Investors should consider multiple factors:

For long-term investing: If the goal is retirement savings or asset appreciation over the long term, you can enter positions when funds are available. Short-term volatility should not be a concern. It is recommended to plan regular investments and maintain discipline.

For short-term trading: Accurate analysis, monitoring economic news, and market-moving events are essential. Short-term trading carries higher risks and requires cautious decision-making.

Consider personal circumstances: Budget, investment horizon, and risk tolerance all influence the timing of investment.

Thorough market analysis: Evaluate economic factors, political stability, and market trends before investing.

How to Trade in Asian Stock Markets

After opening an account—whether real or demo—investors can start immediately. Basic steps include:

1. Access the trading platform via website or app
2. Select the Market menu to view current price charts
3. Choose Indices to see specific stock market indices
4. Select the Asian stock markets of interest

Analysis Strategies for Asian Stocks

Technical Analysis (Technical Analysis)

This method uses price data and trading volume to estimate future price trends, including:

Studying price charts: Observing chart patterns such as candlestick charts to understand ongoing trends.

Identifying support and resistance levels: Key price levels where prices tend to pause or reverse. Recognizing these points aids decision-making.

For example, observing the HK50 chart daily shows the index remains in a downtrend, with a clear downward direction and below the 60-day moving average. Based on this, investors might wait for further developments or look for support levels over a longer period.

Fundamental Analysis (Fundamental Analysis)

This approach tracks economic data of countries or regions, including:

• Interest rates and monetary policies
• Inflation rates
• Quarterly GDP figures
• Import-export data
• Employment rates

Example: Japan recently revised down its Q2 GDP estimate to 4.8% from 6% due to reduced corporate investment. Japan’s November core CPI rose to 3.7% year-over-year, the highest in 41 years since 1984. Such data influence trading decisions.

Summary: When is the Right Time to Invest in Asian Stocks?

Asian stocks offer highly valuable investment opportunities, especially amid current high global inflation, ongoing Russia-Ukraine conflicts, and signs of economic recovery in China. As the regional hub, China plays a key role in driving regional economic growth.

Asia’s proximity allows investors and interested parties to access abundant news and information, providing clearer investment insights. Therefore, investing in this market is a decision worth serious consideration for general investors.