Emerging Scene In Asian Markets



Growth rates: Population growth in Asia has always been the subject of discussions in the developed countries, but changes in economy of Asian countries and the increased participation from USA and UK in Asian Markets has not been given the same amount of publicity. China has a growth rate of over 9% for last many years and India has peaked growth rates of 7.5/8% for last year.

Size of markets: Growth rates are closely linked to economic development and the increase of population and increase of per capita income has meant that the size of Asian Market has increased considerably. Everyone is eyeing the emerging markets in Asia as a big marketplace and this has meant that if you are to grow quickly, you cannot ignore Asian Markets.

The booming markets: Stock markets in Asia are booming. The rate of increase of Asian markets is higher than the US and UK markets. When the markets in US or UK are steady, or move side ways, the Asian markets go up. The down slide of markets is much less when the markets in developed countries slide down. Some of Asian markets have a very low PE and some of them have a high P/E ratio at this moment, but the future projections justify purchasing shares even at this P/E ratio.

Individual markets: Let us now have a look at individual market so as to get a feel of market and growth potential. We will have a look with a 5 t 10 year horizon

China: China has captured a large international market and is growing at a rate of 9.2 percent annually. The market size in purchasing power parity (PPP) basis is of the order of $8.58 trillion. It is the second economy after the USA. Per capita income is about $6200 per year.

The Single child norm adopted (rather forced) by the government of China is responsible for increase in per capita income. Air pollution, soil erosion, corruption, and the aging population are some of the problems that are likely to raise the head in near future. But generally the market is booming and economy is on rise and will continue to rise.

India: India with a population of 103 billion and rising at the rate of about 22 per thousand in one year India has problems of health, infrastructure, pollution, corruption and education to be tackled.

The GDP on PPP basis is $3.6 trillion and is sixth in merit and comes after Chinas and Japan. The per capita income is $3400 per year, and the growth rate is 7.2% and increasing. After 1992 when liberalization and opening of economy started in 1992, the economy is growing. With availability of large trained human resource in sunrise sectors of economy (like information technology, biotechnology, communications) India has the edge in these sectors.

ASEAN countries: Founded in 1967, the ASEAN consists of 10 member countries and has the GDP of $2.1 trillion. Since most of members are sovereign states, the laws are different but are similar and the economy in all the countries growing.

Singapore: An economic super power in East Asia, the economy of Singapore is booming. The smaller Island state has a GDP of $1.31 trillion on PPP base. The per capita income of Singapore at $29780 per year is comparable to that of Japan at 30,400.

As you can see from the above, the economies of Asian region are booming and investments in shares of these companies directly or through mutual funds will give greater capital appreciation. An investment in these markets will give you better capital appreciation than the markets in developed countries.