There’s never been a better time to invest in Asia than now. As pharmaceutical conglomerates confirm the effectiveness of their vaccines and provide hope for everyone, Asian markets begin to pick up again with two of its biggest markets, Japan and China, starting to surge.
Investors use stock market index to compare the current price levels with previous prices and come up with a quantified market performance. These indices are made to measure financial data such as manufacturing output, interest, rates and inflation, of the global, regional, and national markets. Those who have mutual funds and exchange-traded funds (ETFs) in their portfolio primarily track the stock market indices to see whether or not their investments are worth their time and effort. In this post, we’ll take a look at some of the major stock market indexes in Asia.
Here is a quick overview of regional indexes in Asia.
Dow Jones Asian Titans 50 Index
This index is part of the Dow Jones family that produces the second-oldest stock market index in the world, the Dow Jones Industrial Average. The Dow Jones Asian Titans 50 Index is made up of 50 blue chip stocks in Asia-Pacific and half of it is based in Japan. While it isn’t as popular as the S&P Asia 50, the Dow Jones Asian Titans 50 Index reflects 38% of the market capitalization of all stocks traded in the area. The index determines which stocks to include in the index by looking at their revenue, net income, and market cap.
FTSE ASEAN 40 Index
The blue-chip names included in the FTSE ASEAN 40 index come from seven leading ASEAN financial markets: Singapore Stock Exchange, The Philippine Stock Exchange, Bursa Malaysia, Ho Chi Minh Exchange, the Stock Exchange of Thailand, Hanoi Stock Exchange, and Indonesia Stock Exchange. This index has an ETF that gives investors a chance to be exposed to the the fastest-growing economies in ASEAN. Malayan Banking, SingTel, Oversea-Chinese Banking Corp, United Overseas Bank, and DBS Group Holdings are five prominent holdings that make up the top of the FTSE ASEAN 40 Index.
S&P Asia 50 Index
Based on 50 blue chip leading companies from four countries — Hong Kong, Korea, Singapore, and Taiwan — the NY-based S&P Asia 50 Index allows investors to access broad market exposure through its easily replicable index. This index is part of the Financial Planners & Investment Advisers Industry and has ETFs available in the US and in Australia.
National indices in Asia
Nikkei 225 Index
Primarily tracking the Tokyo Stock Exchange, the Nikkei 225 Index lists 225 of Japan’s biggest organizations. The companies included in the list are chosen based on the size of their market capitalization. Furthermore, only blue chip companies are listed on the Nikkei 225 and shut out non-equity based securities and ETFs. Internationally prominent companies such as the Toyota Motor Corporation, NTT Docomo, and the SoftBank Group are at the top of the Nikkei 225 Index.
Hang Seng Index
As with any stock indices, the Hang Seng Index allows an investor to have an overview of how the stock market in Hong Kong is performing. Trading on the HSI essentially entails investing in the 50 largest stocks listed on the Hong Kong Stock Exchange, which is one of the largest and most important stock markets in Asia. Aside from ETFs, you can also invest in the HSI through the iShares MSCI Hong Kong Index Fund ETF, which monitors the MSCI Hong Kong Index that captures 85% of Hong Kong’s total market. If you do choose to invest in companies operating in China, and that are listed on the HSI, you should inform yourself of the political risks as the Chinese government has been known to intervene in these matters.
Philippine Stock Exchange Index
The top 30 companies in the Philippines are the organizations listed in the PSEi. These companies are all chosen to represent how the Philippine stock market moves. There are 7 other indices in the Philippines Stock Exchange, including the All Shares Index and other sector indices that are based on the main source of income of a company. In order for a company to be listed as one of the 30 companies listed on the PSEi, it should have a free float level of at least 12% and it should place among the top 25% in terms of median daily value during a 12-month period in review.
Bangladesh’s Dhaka Stock Exchange (DSE) has several indices. However the DSE Broad Index (DSEX) is considered its benchmark index, reflecting pricing actions of all its listed companies.
China: SSE Composite Index,
CSI 300 Index, and SZSE Component Index
In China, two stock markets are open: the Shanghai Stock Exchange (SE) and Shenzhen Stock Exchange (SZSE). And there are three indices that are of importance to local and foreign investors: SSE Composite Index, CSI 300 Index, and SZSE Composite Index.
SSE Composite Index is a representation of price trends of all stocks that are listed on the Shanghai Stock Exchange. And there are other sub-indices also available such as one that depicts pricing actions of 180 companies, of 50 companies, and large-cap companies (indices of 180, 150 and 20 companies).
Moreover, SZSE Component Index is the primary index for Shenzhen Stock Exchange. It depicts how the 500 companies listed on the exchange has performed.
Lastly, CSI 300 Index follows the top 300 stocks from both exchanges.
India: Sensex, Nifty
India’s two stock exchanges fittingly have separate indices. Firstly, the Stock Exchange Sensitive Index or Sensex measures the performance of the older Bombay Stock Exchange (BSE). It is composed of 30 large companies on BSE that are deemed representative of the domestic market and also of the economy.
Secondly, the later but one that has much more trade volume National Stock Exchange (NSE) has a flagship index called NIFTY 50, short for NSE Fifty. It depicts the pricing patterns of the country’s largest 50 corporations and is said to cover various industries of the country.
Indonesia: IDX Composite
IDX Composite monitors the equities market by recording the price performance of the companies that are part of the Main Board and the Development Board of the Indonesia Stock Exchange. Its official Indonesian name is Indeks Harga Saham Gabungan or IHSG, and it was formerly known as Jakarta Stock Exchange Index or JSX.
Tehran Stock Exchange, Iran’s only stock market, gives updates on current market levels every month. They publish latest trends of five indices, including TEPIX which is also known as TSE All-Share Price Index. But the one considered to be the most important to investors is the TEDPIX (TSE Dividend & Price Index), which is like TEPIX but the difference lies in its consideration of any issued dividends.
TA-35 is the flagship index of Israel’s Tel Aviv Stock Exchange. It portrays the pricing trend of 35 stocks determined to be the largest in terms of market cap. And the current indicator is an expanded version from the previous one, which only reflected 25 companies until a change was made in 2017. Moreover, companies that are part of the list are those involved in telecommunication and homegrown soda machine brand, among other blue chip businesses in the country.
Jordan: ASE100 and Index ASE20
Amman Stock Exchange indices employ market cap-weighted measure on free float shares of companies. There are two that investors can use: the ASE100 which mirrors the price movement of 100 stocks and ASE20 which only mirrors 20. They use the latest closing prices of the stocks and they are published at the end of each trading day.
Kazakhstan: KASE Index
KASE Index is the indicator of Kazakhstan Stock Exchange.
Malaysia: FTSE Bursa Malaysia Emas Index and FTSE Bursa Malaysia ACE Index
Malaysia has two equities markets: the Bursa Malaysia Main Market, which has a listing of corporations with proven corporate earnings, and the ACE Market, an alternative way for new companies with potential for growth to go public.
Thus, there are major indices and sub-indices. The FTSE Bursa Malaysia Emas Index which consists of large-cap (30 companies tracked by FTSE Bursa Malaysia KLCI), mid-cap (included in FTSE Bursa Malaysia 100), and small-cap (FTSE Bursa Malaysia Small Cap Index) corporations in the Main Market. Meanwhile, FTSE Bursa Malaysia Fledgling Index follows the performance of companies whose capitalization does not meet the requirements of the aforementioned indices.
On the other hand, FTSE Bursa Malaysia ACE Index captures and measures the performance of the companies listed on the ACE Market.
Nepal: NEPSE Index
The value-weighted NEPSE Index tracks the companies listed on Nepal Stock Exchange. As an indicator of the condition of the equities market, it also has sub-indices that measures specific industries in banking, trading, hotels, developmental bank, power, finance, insurance, manufacturing, etc.
Oman: MSM-30 Index
Oman’s MSM-30 Index, created in 1992, tracks the “most liquid” and “most profitable” companies listed on the country’s only stock exchange, the Muscat Securities Market. A capitalization-weighted index, its base value of 1,000 is set on June 1, 1990.
Pakistan: KSE-30 Index
Pakistan had three stock exchanges that merged into one single market in 2016—now called the Pakistan Stock Exchange or PSX—and over the years, several indices have been developed. The first was KSE-100 Index in 1991, KSE All Shares Index four years later, and KSE-30 Index in 2006. (All their names date back to Karachi Stock Exchange, the largest of the three before they were combined.) KSE-30 Index differs from the two on the fact that it only considers the market cap on “free float of shares”, and it takes dividends into account.
One other index, established in 2009, is the KMI 30 Index or the KSE Meezan Index. It is composed for 30 companies that are compliant with the Islamic Shariah requirements.
Qatar: QE Index
Previously named DSM-200, the Qatar Exchange (QE) Index traces the returns of the 20 largest and most liquid stocks on the country’s stock market. The base value of 100 is set on December 31, 1999, and it is against which current prices are considered.
Saudi Arabia: Tawadul All Share Index
Saudi Arabia’s stock exchange is called Tawadul, and Tawadul All Share Index or TASI follows the performance of publicly listed corporations on the exchange and on NOMU, which is a platform for companies to go public with less stringent requirements. Some of the companies that are on TASI include SABIC and SAFCO (fossil fuel), Zamil Industrial (real estate), and Arab National Bank (financial).
Created by the FTSE Group, Singapore Exchange (SGX), and Singapore Press Holdings, the Straits Time Index (STI) is the flagship stock market yardstick that captures the growth story of Singapore’s leading 30 companies. It is one of the many indices that form part of the FTSE ST Index Series, which also track all shares, and shares based on capitalization and industries.
South Korea: KOSPI
The Korea Composite Stock Price Index (KOSPI, 코스피지수), established in 1983, reflects the growth of all common stocks on the equities department of the country’s stock market. Current prices are compared to the base value of 100 set in January 4, 1980. Globally known companies that comprise it are Samsung Electronics, Hyundai Motor, Kia Motors, etc.
Sri Lanka: CSE Indices
Sri Lanka’s Colombo Stock Exchange has sector indices for companies belonging to 20 various industries ranging from manufacturing to real estate. In addition, investors can check market levels through the All Share Price Index (ASPI). The ASPI tracks all publicly listed company shares on their current market price to the base value of 100 in 1985.
Another is Standard and Poor Sri Lanka 20 (S&P SL 20) which only includes the top 20 corporations based on their market cap. Companies that are part of it are Distilleries Company of Sri Lanka PLC, Commercial Bank of Ceylon, and John Keells Holdings.
TAIEX or Taiwan Capitalization Weighted Stock Index reflects the price trajectory of every stock listed on Taiwan Stock Exchange with the following exemptions: full-delivery stocks, preferred shares, and IPOs that are no older than a month. Its value is derived by evaluating current prices with respect to the base value of 100 set in 1966. Component companies are Cathay Financial, Taiwan Semiconductor, among others.
Thailand: SET Index
The Stock Exchange of Thailand Index or SET Index considers all common stocks listed on the exchange except those whose trading is put on hold for more than 12 months. It indicates the movement of these prices by comparing their current level to the base value of 100 set on April 30, 1975.
Other domestic indices are based from SET Index. For instance, the top 50 companies are also tracked by SET50 Index, while the top 100 by SET100 Index.
Vietnam: CBV Index, HNX 30, VN30 Index
There are several indices in Vietnam, and among them is CBV Index (also known as Corporates and Businesses of Vietnam Index) that tracks the top 50 companies in the country. Composite corporations are listed on both stock exchanges of Ho Chi Minh and Hanoi, do not include holding companies, and characterized by large cap and high liquidity.
VN30 Index on the other hand follows the top 30 companies listed on Ho Chi Minh Stock Exchange. It is more liquid and has higher cap in comparison to HNX 30 which includes the leading 30 corporations on Hanoi Stock Exchange exclusively.
List of stock indices by country
Below is the list of Asian stock indices arranged alphabetically by country.
|Country||Name of the index|
|China||SSE Composite Index (上证综指), CSI 300 Index (沪深300指数), SZSE Composite Index (深证综合指数)|
|Hong Kong||Hang Seng Index|
|India||Bombay Stock Exchange (BSE) – Sensex, National Stock Exchange (NSE) – Nifty50|
|Israel||TA-125 Index (Tel Aviv 125)|
|Jordan||ASE Weighted Index|
|Malaysia||FTSE Bursa Malaysia Emas Index, FTSE Bursa Malaysia Fledgling Index, FTSE Bursa Malaysia ACE Index|
|Pakistan||KSE 100 Index, KSE All Share Index, KSE-30 Index|
|Philippines||PSE Index (PSEi)|
|Saudi Arabia||Tawadul All Share Index|
|Singapore||Straits Times Index (STI)|
|South Korea||KOSPI (코스피지수)|
|Sri Lanka||All Share Price Index (ASPI)|
|Taiwan||Taiwan Capitalization Weighted Stock Index (TAIEX)|
|Thailand||SET Index, SET50 Index, SET100 Index|
|Vietnam||CBV Index, HNX 30, VN30 Index|
How to invest in Asian indices
So you might ask how you can start investing. There are mutual funds and unit investment trust funds available to Filipinos who wish to put their money in non-domestic Asian shares in the hopes of future potential returns. While they may not strictly focused on the indices mentioned above, they allow you exposure to various Asian equities.
See the table below of the funds arranged alphabetically. Likewise, the table also states their respective benchmark; meaning, this is what they’re measuring their performance against.
|ATRAM Asia Equity Opportunity Feeder Fund||ATRAM||UITF||MSCI AC Asia Pacific ex Japan Net Index|
|ATRAM AsiaPlus Equity Fund, Inc.||ATRAM||Mutual fund||MSCI AC Asia ex-Japan Index|
|Manulife Asia Best Select Equity Fund (PHP Unhedged Class A)||Manulife||UITF||MSCI Asia ex Japan Index|
|Manulife Asia Best Select Equity Fund (USD Class A)||Manulife||UITF||MSCI Asia ex Japan Index|
|Manulife Asia Best Select Equity Fund (USD Class I)||Manulife||UITF||MSCI Asia ex Japan Index|
|Manulife Asia Pacific REIT Fund of Funds (PHP Unhedged Class A)||Manulife||UITF||Manulife Investment Asia REIT ex-Japan Index|
|Manulife Asia Pacific REIT Fund of Funds (USD Class A)||Manulife||UITF||Manulife Investment Asia REIT ex-Japan Index|
|Metro$ Asian Investment Grade Bond Fund||Metrobank||UITF||90% JP Morgan Investment Grade Total Return Index and 10% Philippine Dollar Deposit Rate Savings Deposit|
|Odyssey Asia Pacific High Dividend Equity Fund||BPI Asset Management||UITF||MSCI AC Asia Pacific ex-Japan Total Return Index|
|PAMI Asia Balanced Fund, Inc.||PAMI||Mutual fund||50% MARKIT IBOXX Asian Local Bond Index (ALBI) + 50% MSCI AC Pacific EX Japan|
|SB ASIA PACIFIC EQUITY FEEDER FUND (Class A)||Security Bank||UITF||MSCI AC Asia Pacific ex Japan Total Index|
|SB ASIA PACIFIC EQUITY FEEDER FUND (Class B)||Security Bank||UITF||MSCI AC Asia Pacific ex Japan Total Index|
|SB ASIA PACIFIC EQUITY FEEDER FUND (Class F)||Security Bank||UITF||MSCI AC Asia Pacific ex Japan Total Index|
In order to begin investing, you can:
- Inquire at the investment houses that you see above. You may check these mutual fund company contact details as well as the contacts of UITF companies.
- Check important details such as the fund’s asset portfolio, risks, sales load, fees, etc.
- You’d be asked to fill out documents to assess your risks profile, time horizon, etc.
- Remember that you would be opening yourself up to an aggressive type of assets and there are risks. You may want to read this related article that discusses equities funds.
- One you’re ready, prepare your money that is required as your starting capital.
- At least one valid identification card is also required.
- Monitor your fund from time to time.
As Asian markets continue to dominate globally and attract numerous investors, it’s worth keeping yourself informed of some of the top indices that you can find in the region. Doing so can help you make better choices when it comes to investments such as exchange traded funds (ETF) and mutual funds.Tags