• Thu. Jul 25th, 2024

Things you might not have known about Asia’s markets, according to HSBC

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Electronic screens display gongs at the Exchange Square Complex, which houses the Hong Kong Stock Exchange, in Hong Kong, China, on Tuesday, March 15, 2022.

Paul Yeung | Bloomberg | Getty Images

Asia’s markets are expected to continue powering ahead this year, despite a rocky 2023.

Most investors may already know which were the the best — and worst — performing markets last year. (If not, read here.)

But HSBC Global Research recently revealed lesser known facts about Asian stock markets in 2023, and CNBC picked out three.

1. Apple’s market cap was bigger than the whole of Taiwan’s or South Korea’s stock market

Asia has been touted as the growth area to watch out for in the world. The International Monetary Fund is expecting 4.2% growth from the region in 2024, compared to 2.9% globally.

However, what may not be apparent is the size of the gap Asia has to bridge.

Apple, the largest company in the world by market cap, is larger than the entire listed equity universe of Taiwan or South Korea.

According to HSBC’s data, Apple was worth $3.01 trillion at the end of 2023.

The company that created the iPhone and Macintosh is also bigger than six of Southeast Asian largest markets combined, the bank said in its report.

As of Dec. 29, South Korea’s entire listed equity universe stood at $1.9 trillion, while Taiwan’s entire listed equity universe was at $2 trillion.

The ASEAN-6, made up of the economies of Brunei, Indonesia, Malaysia, the Philippines, Singapore and Thailand had a total listed equity universe of $2.5 billion.

2. The combined market cap of the top 5 Chinese property companies was equal to Indonesia’s largest bank, BCA.

Southeast Asia as a region is a relatively smaller market compared to China, the world’s second largest economy. But Chinese stocks took a massive hit in 2023, falling nearly 12% last year as real estate stocks plunged.

Last year, two companies in that sector dominated headlines: Country Garden Holdings and Evergrande. Share prices of the former real estate heavyweights plunged in 2023, dragging down the entire sector which makes up about one quarter of the Chinese economy.

China’s property sector fell so sharply that the market cap of Indonesia’s largest bank, Bank Central Asia or BCA, is now almost equal to the five largest property developers in China.

In comparison, the same five companies were four times as large as BCA in 2022, according to HSBC.

BCA commanded a market cap of $74.4 billion as of Dec. 29, HSBC figures show.

The bank’s data pointed out that the five largest Chinese property developers, namely, China Resources Land, China Overseas Land & Investment, China Vanke, Poly Development and China Merchants Shekou had a combined market cap of about $77.9 billion in the same period.

3. Singapore’s GDP is larger than Hong Kong. But the SGX market cap is less than 10% of the HKEX.

Singapore’s economy is bigger than Hong Kong’s and both are major financial centers in Asia, but the market value of their respective stock markets are vastly different.

Using data from 2022, HSBC said Singapore’s full year gross domestic product amounted to $467 billion, while Hong Kong’s GDP came in at $360 billion that year.

However, the total market cap of companies listed on the Hong Kong Exchange was at $4.7 trillion, compared to the Singapore Exchange’s total market cap of $404 billion as of Dec. 29, HSBC data showed.

Why does Singapore’s stock market have such a low market cap despite the wealth flowing through the city state?

HSBC’s head of equity strategy for Asia Pacific Herald van der Linde said “the matter here is that the SGX lists mostly Singapore and ASEAN firms.”

In comparison, Hong Kong has local listings and H-shares, which are Chinese companies listed in Hong Kong.

There are also some global names on the Hong Kong market, including luggage company Samsonite and luxury brand Prada, van der Linde added.

As such, van der Linde said, Hong Kong as a stock exchange has a broader appeal, given a much wider, larger coverage area that includes one of the world’s largest economies.

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