Are you considering investing in the Asian stock market? If so, you should know how it works and what its characteristics are. To make it clear, in this article we explain how Asian bags work and what their characteristics are. Of course, we warn you from the first moment: it is not a simple operation, you will need a deep knowledge to invest without added risk in any of its stock indices. Ready to learn more about Asian bags?
How do Asian stock exchanges work?
Like those of any other continent, Asian exchanges are markets in which investors exchange securities through indices, raw materials, bonds, stocks, that is, financial assets in general. They are organized markets whose objective is that buyers and sellers increase their profits.
Given the economic boom in some Asian countries, many investors see in their exchanges a way to diversify their investment portfolios and, also, to produce broad returns in the short term.
As in the rest of the markets, companies seeking to finance themselves through the issuance of shares (variable income) and bonds (fixed income) go to Asian exchanges. When the participants in the stock market acquire these financial titles, the companies obtain in return benefits in the form of money and expansion of their own companies.
In general, companies participate in these financial markets because it is cheaper for them to take money from the stock market than to request it, through loans, from a financial institution. not to mention that when you issue shares, your capital could increase as the share appreciates. As in other markets, supply and demand are the mechanisms that mark the prices of assets.
What are the main Asian exchanges?
Tokyo Stock exchange or Japan exchange Group (JPX ): open from 9:00 a.m. to 3:00 p.m. local time, its main index is the nikkei 225. It is the third largest exchange in the world, the first in the Japanese country and one of the most important Asian exchanges on the continent. It has more than 2,000 companies listed on it and its capitalization is around 3,300 billion dollars.Hong Kong Stock exchange or Hong Kong Stock exchange (HKSe ): open from 9:14 a.m. to 4:00 p.m. local time, its main stock index is the Hang Seng Index (HSI). It is one of the most important in the world and its market capitalization stands at approximately 2,831 billion dollars.Shanghai Stock exchange or Shanghai Stock exchange (SSe): its hours of operation are from 9:30 a.m. to 3:00 p.m. local time. It is administered by the China Securities Market Regulatory Commission (CRSC) and has a market capitalization of around 4,365 million dollars. It is the third largest exchange on the Asian continent and the sixth largest in the world. It is not completely open to foreign investors, due to Chinese government regulations.Bombay Stock exchange or Bombay Stock exchange (BSe): The Indian stock exchange is one of the oldest in Asia. It was founded in 1850 and is currently operational from 9:15 a.m. to 3:30 p.m. local time. Given its age, it is considered one of the 10 most important exchanges in the world. The main index of the Bombay stock exchange is the BSe Sensex, although the BSe Small Cap, BSe Mid Cap and BSe 500 indices also stand out. This exchange was one of the first to implement the centralized global system through the Internet so that issuers and investors could operate on the platform itself.South Korean Stock exchange or Korea exchange (KRX): This is the only operator of the South Korean stock exchange. It is operational from 9:00 a.m. to 3:30 p.m. local time, and its main indicator is the KOSPI (Korea Composite Stock Price Index). Its headquarters are in Busan and its market capitalization reaches 1.2 trillion dollars.
Characteristics of Asian exchanges
If you are going to invest in Asian exchanges, you must keep in mind its characteristics and the environment in which it moves, so different from the one you have become used to:
In- depth knowledge of these stock markets is necessary.The hours that they are operational work when you are resting at night, which makes it difficult to follow their evolution.The scenario in which the stock exchanges operate is very different from the economic approaches of the western stock markets. This will prevent you from digging into these indices.They require applying other strategies and guidelines different from those you apply in the western stock markets.