Along with its various countries and economies, the Asian investment thesis has certainly evolved over the years.
Those born in the 1960s and 1970s surely remember the 1980s when Japan's economy rose to global prominence, showing the world that at least at that time, Japan truly was the land of the rising sun.
The Asian financial crisis struck in the late 1990s, but that even only temporarily chased Western investors away from the continent. Caution would give way to ebullience earlier this century as investors became enamored by the Chinese and Indian growth stories.
Flush with statistics about that pair representing two of the fastest growing economies in the world and that one or both would one day pass the U.S. in terms of economic heft, investors were once again seduced by Asian opportunities.
Renewed appetite for Asian exposure coincided with another boom, that of the exchange-traded fund (ETF) industry. As the Chinese and Indian economies became juggernauts, ETF sponsors have met investor demand for exposure to these countries coming up with everything from ETFs focused on Chinese technology companies to Indian small-caps.
ETF issuers did not stop there. As investors clamored for ways to access other Asian markets, ETF sponsors obliged.
In other words, the Chinese and Indian growth stories gave way to the burgeoning economies of Indonesia, Thailand and others. Since the March 2009 market bottom, the iShares MSCI Thailand Investable Market Index Fund (NYSE: THD) and the Market Vectors Indonesia ETF (NYSE: IDX) have been two of the best performing ETFs of any kind.
Those funds are still performing well, but a case can be made there is a new sheriff on the Asian investment block.
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Winning the Race for Resources
The world watched in awe as American swimmer Michael Phelps became the most decorated Olympian of all time.
I've read he's been training in the pool for an average of 6 hours a day, 6 days per week, which equates to about 30,000 hours since age 13 and about 10,000 calories burned during a training day. It's inspiring to see the incredible results of his tremendous sacrifice and commitment.
Investing in global markets requires the same sort of stamina, especially at times like this week, when the month's reading on the manufacturing industry was not encouraging. The J.P. Morgan Global Manufacturing PMI of 48.4 for July was the lowest since June 2009.
However, I believe there are encouraging pockets of strength to energize and inspire investors.
For example, we're coming up on the anniversary of the first stimulus move that kicked off the global easing cycle.
On August 31, 2011, Brazil unexpectedly cut rates by 50 basis points, and since then, ISI says 228 stimulative monetary and fiscal policy moves have been initiated across several countries, including the Philippines, China, France, and Colombia.
In June and July alone, there were nearly 70 moves-the most since the world began this massive easing.
Generally, by the time central banks make a fiscal or monetary easing move, economic deterioration has already occurred.
Even with these moves, it still takes several months for the stimulative measures to take effect and work their way through.
I've read he's been training in the pool for an average of 6 hours a day, 6 days per week, which equates to about 30,000 hours since age 13 and about 10,000 calories burned during a training day. It's inspiring to see the incredible results of his tremendous sacrifice and commitment.
Investing in global markets requires the same sort of stamina, especially at times like this week, when the month's reading on the manufacturing industry was not encouraging. The J.P. Morgan Global Manufacturing PMI of 48.4 for July was the lowest since June 2009.
However, I believe there are encouraging pockets of strength to energize and inspire investors.
For example, we're coming up on the anniversary of the first stimulus move that kicked off the global easing cycle.
On August 31, 2011, Brazil unexpectedly cut rates by 50 basis points, and since then, ISI says 228 stimulative monetary and fiscal policy moves have been initiated across several countries, including the Philippines, China, France, and Colombia.
In June and July alone, there were nearly 70 moves-the most since the world began this massive easing.
Generally, by the time central banks make a fiscal or monetary easing move, economic deterioration has already occurred.
Even with these moves, it still takes several months for the stimulative measures to take effect and work their way through.
China Makes Its Move
But while the world wades in the shallow end of the pool waiting for the economy to warm up, Asia has taken a deep dive into the energy space as they've recently announced acquisitions of Canadian resources companies.Asia's Surging Economic Growth Pushes Global IPO Market to Record High That Will Continue in 2011
Despite market volatility and a shaky economic recovery, the global initial public offering (IPO) market for 2010 is on track to hit a record high – and 2011 is poised to continue the hot streak.
A study by accounting group Ernst & Young yesterday (Wednesday) showed that funds raised through global IPOs are expected to surpass $300 billion in 2010, topping the 2007 record of $295 billion. IPOs in the first 11 months of the year collected $255.3 billion in 1,199 deals.
"New IPO filings continue to increase around the world and a large backlog has built up as companies await greater macroeconomic stability," said Gregory Ericksen, Ernst & Young's global vice chair for strategic growth markets. "We expect the current IPO momentum to continue its upward trend in 2011."
A study by accounting group Ernst & Young yesterday (Wednesday) showed that funds raised through global IPOs are expected to surpass $300 billion in 2010, topping the 2007 record of $295 billion. IPOs in the first 11 months of the year collected $255.3 billion in 1,199 deals.
"New IPO filings continue to increase around the world and a large backlog has built up as companies await greater macroeconomic stability," said Gregory Ericksen, Ernst & Young's global vice chair for strategic growth markets. "We expect the current IPO momentum to continue its upward trend in 2011."
Asia Forecast: High Growth Rates Will Create Top Profit Opportunities For 2011
Asia was a great place to invest this year.
While some individual Latin American markets have outpaced their Asian counterparts, the fact is that the 10.9% return of the overall MSCI Asia Index outdistanced the 10.3% return of the "Americas" region.
Investors can expect more of the same in the New Year. The fact is that the Asian region - including Australia and New Zealand - was a profit powerhouse in 2010. And Asia's prospects for 2011 are even brighter:
While some individual Latin American markets have outpaced their Asian counterparts, the fact is that the 10.9% return of the overall MSCI Asia Index outdistanced the 10.3% return of the "Americas" region.
Investors can expect more of the same in the New Year. The fact is that the Asian region - including Australia and New Zealand - was a profit powerhouse in 2010. And Asia's prospects for 2011 are even brighter:
- It's where a great majority of the world's growth is taking place.
- And it's where investors can reap their biggest profits - if they pick the right investments in the best Asian markets.
In this report, we're going to detail that all for you...
Sorry Wall Street – Asia is the New King of the Global IPO Market
The United States - and Wall Street - is surrendering its mantle as the global center for intial public stock offerings (IPOs).
In fact, unprecedented demand for IPOs in Asia has reduced the U.S. share of the global IPO market to an all-time low.
With another $10 billion in IPO deals expected to be completed by the end of this year, the total amount raised worldwide for all of 2010 will approach $145 billion.
With $76 billion raised - including $22.1 billion from Agricultural Bank of China Ltd., alone - China topped the field by raising the most money of any single country.
No U.S. company raised more than $700 million.
This says a lot about the respective outlooks for the two countries' economies. And it also tells us a great deal about how we should be investing our money.
Let me explain.
In fact, unprecedented demand for IPOs in Asia has reduced the U.S. share of the global IPO market to an all-time low.
With another $10 billion in IPO deals expected to be completed by the end of this year, the total amount raised worldwide for all of 2010 will approach $145 billion.
With $76 billion raised - including $22.1 billion from Agricultural Bank of China Ltd., alone - China topped the field by raising the most money of any single country.
No U.S. company raised more than $700 million.
This says a lot about the respective outlooks for the two countries' economies. And it also tells us a great deal about how we should be investing our money.
Let me explain.
To understand how to profit from this dramatic trend, please read on...
Singapore Moves to Restructure Asia's Stock Exchange Model With Australia Merger
Singapore Exchange Ltd. (SGX) announced yesterday (Monday) it agreed to buy Australia's main stock exchange, ASX Ltd., for $8.3 billion. The deal came about because both countries seek strength against growing Asian market competition, and Singapore strives to be a more sophisticated global financial center.
In a cash and stock deal, Singapore's stock market operator is offering A$48 (U.S. $47.11) for each ASX share, consisting of A$22 in cash and 3.743 SGX shares per ASX share. The offer is at a 37% premium to what ASX shares traded on Friday.
"The combination of ASX and SGX, offering innovative new products and services to the market, will allow customers to maximize future opportunities, where Asia Pacific takes center stage globally as the source for capital, wealth creation and trading opportunities," SGX Chief Executive Officer Magnus Bocker said in a joint statement.
In a cash and stock deal, Singapore's stock market operator is offering A$48 (U.S. $47.11) for each ASX share, consisting of A$22 in cash and 3.743 SGX shares per ASX share. The offer is at a 37% premium to what ASX shares traded on Friday.
"The combination of ASX and SGX, offering innovative new products and services to the market, will allow customers to maximize future opportunities, where Asia Pacific takes center stage globally as the source for capital, wealth creation and trading opportunities," SGX Chief Executive Officer Magnus Bocker said in a joint statement.
Keeping Tabs on Thailand: An Asian Tiger Lurking Low in the Reeds
Last week we talked about Singapore and Thailand - two Asian economies that are quietly taking off. Today I want to add to those thoughts with a few more key points that opportunistic U.S. investors should know about Thailand, in particular.
Over the weekend, the Thai currency, the baht, rose to its highest level since 1997 due to an improved outlook for economic growth and expectations of more investor inflows. A current-account surplus of $5.42 billion this year through July and the fact that the Bank of Thailand has raised its benchmark interest rate twice this year have also helped the baht post the second-best performance among Asia's most-traded currencies excluding the yen.
"There has been quite a lot of demand to buy the baht from offshore, probably from foreigners to buy Thai stocks and bonds," Kozo Hasegawa, a Bangkok-based foreign-exchange trader at Sumitomo Mitsui Banking Corp., told Bloomberg News. "Money is flowing into Asia on the region's strong economic outlook."
The rise in the currency has coincided with a 30% advance in Thailand's SET Index since May, when government troops smashed anti-government protests.
Over the weekend, the Thai currency, the baht, rose to its highest level since 1997 due to an improved outlook for economic growth and expectations of more investor inflows. A current-account surplus of $5.42 billion this year through July and the fact that the Bank of Thailand has raised its benchmark interest rate twice this year have also helped the baht post the second-best performance among Asia's most-traded currencies excluding the yen.
"There has been quite a lot of demand to buy the baht from offshore, probably from foreigners to buy Thai stocks and bonds," Kozo Hasegawa, a Bangkok-based foreign-exchange trader at Sumitomo Mitsui Banking Corp., told Bloomberg News. "Money is flowing into Asia on the region's strong economic outlook."
The rise in the currency has coincided with a 30% advance in Thailand's SET Index since May, when government troops smashed anti-government protests.
Two Asian Economies Flying Under the Radar
You know about China, India, and maybe even Korea, but there are two other Asian economies making waves in the South China Sea.
I'm talking about Singapore and Thailand.
While the U.S. economy would be really lucky to poke along at a 3% annualized rate this year and next, the fast-growing countries on the other side of the globe are ripping higher.
Regional analysts surveyed by Bloomberg News survey said they see Singapore expanding at a record pace this year of 14.9% due to improving demand for the city-state's exports. That's up from an estimate of 9% published three months ago. Singapore's economy relies on trade, finance and tourism. Its central bank said the surge would be led by a 29% expansion of manufacturing.
I'm talking about Singapore and Thailand.
While the U.S. economy would be really lucky to poke along at a 3% annualized rate this year and next, the fast-growing countries on the other side of the globe are ripping higher.
Regional analysts surveyed by Bloomberg News survey said they see Singapore expanding at a record pace this year of 14.9% due to improving demand for the city-state's exports. That's up from an estimate of 9% published three months ago. Singapore's economy relies on trade, finance and tourism. Its central bank said the surge would be led by a 29% expansion of manufacturing.
China Using Government Muscle to Turbo Charge its Auto Industry
Having already supplanted the United States as the world's largest auto market, China is on the fast track to becoming the global leader in hybrid and electric cars.
General Motors and Chrysler were forced into bankruptcy largely because they failed to pursue more fuel-efficient models. Indeed, GM and Chrysler looked wholly unprepared as gas prices soared over $4.00 a gallon in 2008.
As GM emerges from bankruptcy - having been bailed out by the U.S. government - it will put a renewed focus on alternative energy. Unfortunately, it's too late to make a difference. As U.S. car companies sputtered amid the country's economic collapse, carmakers in China raced ahead. And with billions of dollars in government backing, they are the companies that will set the pace for the global auto market.
General Motors and Chrysler were forced into bankruptcy largely because they failed to pursue more fuel-efficient models. Indeed, GM and Chrysler looked wholly unprepared as gas prices soared over $4.00 a gallon in 2008.
As GM emerges from bankruptcy - having been bailed out by the U.S. government - it will put a renewed focus on alternative energy. Unfortunately, it's too late to make a difference. As U.S. car companies sputtered amid the country's economic collapse, carmakers in China raced ahead. And with billions of dollars in government backing, they are the companies that will set the pace for the global auto market.
Investing Strategies: How to Build a Global-Investing Portfolio Using ETFs
It wasn't all that long ago that global investing was an activity that was restricted to only the wealthiest U.S. investors. If you weren't one of America's ultra-rich, you weren't able to access foreign markets.
That began to change in the 1950s, with the advent of international and global mutual funds, and access further expanded over the next three decades with the introduction of single-country closed-end funds. Today, thanks to the recent explosion in exchange-traded funds (ETFs), investing in overseas stocks is now almost as easy as targeting a given market sector here at home.
In fact, although it has been a mere 17 years since the first ETF began trading in the United States (in 1993), the most recent count finds more than 290 international, regional and foreign-country-focused funds listed on the various U.S. exchanges - enough to entice any investor with even a modest yen for overseas portfolio exposure.
That began to change in the 1950s, with the advent of international and global mutual funds, and access further expanded over the next three decades with the introduction of single-country closed-end funds. Today, thanks to the recent explosion in exchange-traded funds (ETFs), investing in overseas stocks is now almost as easy as targeting a given market sector here at home.
In fact, although it has been a mere 17 years since the first ETF began trading in the United States (in 1993), the most recent count finds more than 290 international, regional and foreign-country-focused funds listed on the various U.S. exchanges - enough to entice any investor with even a modest yen for overseas portfolio exposure.
Singapore's Economy Leads Asia's Rebound With Record-Breaking 2010 Growth
Singapore's economy grew at a record-breaking pace in the first half of 2010, boosting Asian economic growth that is outpacing the rest of the world.
Singapore's Ministry of Trade and Industry reported yesterday (Wednesday) that gross domestic product (GDP) grew by 18.1% in the first half of the year, expanding 26% in the second quarter from the previous three months, and 19.3% in the second quarter from the same 2009 period.
The rise is the country's biggest since record-keeping began in 1975.
Singapore's Ministry of Trade and Industry reported yesterday (Wednesday) that gross domestic product (GDP) grew by 18.1% in the first half of the year, expanding 26% in the second quarter from the previous three months, and 19.3% in the second quarter from the same 2009 period.
The rise is the country's biggest since record-keeping began in 1975.
South Korea Raises Interest Rates, Joining Asian Movement to Reduce Stimulus
South Korea on Friday joined a chorus of Asian countries in cooling their economies by raising its benchmark interest rate and removing monetary stimulus from its financial system.
The Bank of Korea (BOK) joined counterparts across Asia by notching its rate up by 0.25 percentage point to 2.25%, lifting its key policy rate for the first time since August 2008 - the beginning of the global financial crisis.
But the BOK stressed it is just nudging rates up from emergency levels to counter the threat of inflation and curb a rise in household credit. Asia's fourth-biggest economy joined other economies during the global financial crisis by slashing interest rates, knocking them down three times and shaving a total of 325 basis points off the benchmark rate.
The Bank of Korea (BOK) joined counterparts across Asia by notching its rate up by 0.25 percentage point to 2.25%, lifting its key policy rate for the first time since August 2008 - the beginning of the global financial crisis.
But the BOK stressed it is just nudging rates up from emergency levels to counter the threat of inflation and curb a rise in household credit. Asia's fourth-biggest economy joined other economies during the global financial crisis by slashing interest rates, knocking them down three times and shaving a total of 325 basis points off the benchmark rate.
The Real Housewives of Japan: Shopping for Bargains ... Driving Deflation?
KYOTO, Japan - Could 70,000 Japanese housewives tip this Asian giant into a deflationary spiral?
As farfetched as that sounds, it's become a major cause for concern in this nation of 128 million, which has been in an economic funk for two decades. These "real housewives" are part of a user-driven, social-networking site called Mainichi Tokubai, which delivers the best prices on specific grocery-store items to the fingertips of Tokyo-region consumers.
To hear frustrated Japanese policymakers and retail executives tell it, these bargain-minded consumers and their equally frugal social-networking site is almost-single-handedly undercutting the Japan's economy.
"We understand consumers want the best deals," Japan Chain Stores Association executive Shoichi Ogasawara groused to CNN's Kyung Lah. "And we understand that the social-networking site is a natural extension of consumer behavior in the Information Age. But supermarket prices have fallen for 13 years in a row in Japan," and sites such as this are making it difficult to reverse that trend.
Don't make the mistake of believing that something similar couldn't happen here in the U.S. market. Given that Japan's consumer technology tends to be anywhere from 18 months to two years ahead of U.S trends, this could be a preview of what's to come for the badly troubled U.S. economy.
As farfetched as that sounds, it's become a major cause for concern in this nation of 128 million, which has been in an economic funk for two decades. These "real housewives" are part of a user-driven, social-networking site called Mainichi Tokubai, which delivers the best prices on specific grocery-store items to the fingertips of Tokyo-region consumers.
To hear frustrated Japanese policymakers and retail executives tell it, these bargain-minded consumers and their equally frugal social-networking site is almost-single-handedly undercutting the Japan's economy.
"We understand consumers want the best deals," Japan Chain Stores Association executive Shoichi Ogasawara groused to CNN's Kyung Lah. "And we understand that the social-networking site is a natural extension of consumer behavior in the Information Age. But supermarket prices have fallen for 13 years in a row in Japan," and sites such as this are making it difficult to reverse that trend.
Don't make the mistake of believing that something similar couldn't happen here in the U.S. market. Given that Japan's consumer technology tends to be anywhere from 18 months to two years ahead of U.S trends, this could be a preview of what's to come for the badly troubled U.S. economy.
To see how Japan's consumers have taken matters into their own hands, please read on...
Six Ways to Invest in Korea - Asia's Can't-Miss Market
With the U.S recovery looking a bit iffy after last week's unemployment report, Japan and Britain battling huge budget problems and Europe in trouble because of the Greek debt crisis, investors have quite naturally shifted their focus to Asia.
But even there the pickings seem a bit slim. Asian stalwarts China and India show signs of overheating (India more so than China). Taiwan and Singapore - both excellent markets - seem pretty fully valued right now.
That leaves us with one Asian market whose economy is enjoying well-balanced growth, whose government is a model of competence and efficiency and whose stock market is surprisingly reasonably valued.
I'm talking about South Korea.
To discover the five essential Korea profit plays, please read on...
But even there the pickings seem a bit slim. Asian stalwarts China and India show signs of overheating (India more so than China). Taiwan and Singapore - both excellent markets - seem pretty fully valued right now.
That leaves us with one Asian market whose economy is enjoying well-balanced growth, whose government is a model of competence and efficiency and whose stock market is surprisingly reasonably valued.
I'm talking about South Korea.
To discover the five essential Korea profit plays, please read on...
China's Exports Surprise Contradicts the Critics
Chinese exports in May posted a 50% gain over last year, blowing away estimates and suggesting that the risk of a Chinese economic slowdown is overblown, Reuters reported, citing anonymous sources.
China's official export numbers will be reported tomorrow (Thursday) as part of broader trade data, but had been expected to rise 32% year-over-year after recording 30.5% growth in April.
Chinese economic figures are often leaked widely in markets and government circles ahead of their official release, and are sometimes subject to last-minute revisions.
China's official export numbers will be reported tomorrow (Thursday) as part of broader trade data, but had been expected to rise 32% year-over-year after recording 30.5% growth in April.
Chinese economic figures are often leaked widely in markets and government circles ahead of their official release, and are sometimes subject to last-minute revisions.