Japan is currently the world’s third biggest economy after the United States and China. Its capital, Tokyo, is home to Asia’s biggest stock exchange (Tokyo Stock Exchange), which is also the third largest in the world. Tokyo Stock Exchange has recently merged with Osaka Stock Exchange to form Japan Exchange Group.
The exchange has two trading sessions in a day, the morning and afternoon periods, with a break in-between (which isn’t common for Western exchanges). The security symbols (codes) are numerical, rather than letter-based. For instance, Sony has a code of 6758.
Large-cap stocks are traded in the so-called First Section, while medium-sized stocks are in the Second Section. There is also Mothers market for high-growth, relatively new companies.
A variety of financial instruments is traded in addition to stocks. These include bonds, ETFs, REITs, and derivatives.
Hong Kong has been known as a gateway to Asia. Hong Kong is also known as one of the four Asian Tigers, with Singapore, Taiwan, and South Korea being the other three. This name came around as a result of dynamic growth of these economies.
This dynamic city, now part of China, is a home to a major stock market. Hong Kong Stock Exchange is the second biggest stock exchange in Asia. While some of the listed companies are based in Hong Kong, many come from mainland China and other countries. This offers investors exposure to mainland Chinese equities with the benefits of investing via HK’s free market economy.
As with other major exchanges, stocks, fixed-income products, ETFs, and derivatives are traded.
The Shanghai Stock Exchange and Shenzhen Stock Exchange are two exchanges operating in the People’s Republic of China (ex-Hong Kong). Given the size and growth of the Chinese economy, now surpassing that of the United States (on a purchasing-power parity), these two exchanges are relatively large and growing.
However, foreign investors are partially restricted from investing there. The solutions to that include investing via Hong Kong Exchange, buying shares of Chinese companies listed abroad (including ADRs), as well as a multitude of mutual funds and exchange-traded funds that invest in China.
Singapore is a small city-nation but it is a very modern economy, one that is included among the four Asian Tigers. A large part of Singapore’s income comes from financial services sector, which is among the top in Asia, and of significant importance in the region.
Singapore Exchange offers trading in stocks, ADRs, warrants, REITs, ETFs, fixed-income products, and derivatives.
South Korea is another Asian Tiger economy. The Korea Exchange is located in Seoul and Busan. Various financial instruments are traded there including stocks, fixed income products, derivatives, ETFs, REITs, and warrants. Given South Korea’s importance in the world’s economy and its strong export sector, the Korea Exchange is an important Asian financial market.
Malaysia is now among more developed nations in Asia. Kuala Lumpur Stock Exchange (now known as Bursa Malaysia) offers trading for a wide range of financial securities. Although not as big as other major Asian exchanges, it has its own regional significance in a developing region of South-East Asia.
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It is said that the 19th century was the century of Europe, 20th the century of America, and the 21st will be the century of Asia. That is yet to be seen. Whatever happens, it is worth learning about dynamic Asian-Pacific financial markets.