There are only two major landmarks throughout Asia-Pacific in good locations so far by 2022, and both are in Southeast Asia.
Since the closing of the market on Wednesday, Singapore’s Straits Times index ranks regionally, up 3.25% year-on-year.
Singapore stocks are “a safe haven among global warming markets,” Morgan Stanley share analysts Wilson Ng and Derek Chang said in a paper published May 12.
“Global markets are experiencing growth spurts as inflationary pressures rise, interest rates rise as major banks tighten monetary policy, and inflation resulting from asset shocks created by events in Ukraine and China,” said Ng and Chang.
“Despite the global uncertainty, Singapore’s major developments appear to be stable. GDP growth is expected to slow, but continue to decline due to re-opening progress this year, ”they said.
Indonesia’s Jakarta Composite ranks second in the region, with annual profits to date of 3.22%.
Both indicators have worked extremely peer-to-peer across the region, which has seen losses so far this year. Chinese markets were among the worst hit.
The Shenzhen segment in China is ranked last among major regional markets, as it has dropped by more than 24% since the beginning of the year. Shanghai Composite also saw huge losses, sliding by about 15% over the same period.
The combination of factors has contributed to the weakness of Chinese stocks, from uncertain perceptions of controlling tech-like industries to concerns about supply chain disruptions, as the continent has for weeks been battling the worst Covid wave since early 2020.
Elsewhere in North Asia, the Kospels of South Korea and Taiex in Taiwan – home to several large export firms that benefited from the outbreak of the epidemic – have both dropped by more than 10% each so far this year.
“Many of the reasons justify the limited market performance of ASEAN YTD,” said Chetan Seth, Asia-Pacific equity strategist at Nomura, referring to the Association of Southeast Asian Nations. He cited factors such as the region benefiting from the economic recovery and the Indonesian and Malaysian markets “being well promoted in higher commodity prices.”
“Amid growing concerns about geo-political risks and declining global growth, ASEAN equity often performs much better as there is a lower level of global trade – especially compared to North Asia,” Chetan said.
Winnie Wu of Bank of America said the efficiency of banks is one of the reasons for the strong performance of ASEAN.
“Due to rising interest rates and exchange rate growth, banks have performed very well across the region,” said Wu, China’s chief strategist and head of China’s largest financial research firm at the company. “The markets of Singapore, Indonesia and Australia have the highest financial indicators, and they are very efficient, while the finances are low in Japan, Korea and China.”