Big Picture: Rest of Asia Rose In Line with U.S. and Europe Markets

South Korea, Japan and Taiwan were the star performers in North Asia. India was good too with Malaysia kinda flat.

Why you should care: The markets in North Asia (SK, JP and TW) are big producers of electrical & and electronics for the advanced markets in the U.S. and Europe. The AI trend is in full swing now, so there might be opportunities in the various tech companies in these countries. In Southeast Asia, some countries also serve as intermediate production hubs for North Asia.

South Korea: Exports rebounded, great!

In line with U.S. and European markets to which South Korean companies sell most of their products, the KOSPI rose by 11.3%. This was mainly driven by the sectors of industrials (+17.3%), materials (13.0%), telecommunications (+12.2%) and technology (+11.4%). Exports for October 2023 rebounded to 5.1% from a decline of 4.4% in September 2023. For context, South Korea’s exports have declined continuously since November 2022 and exports encompassed about 48% of gross domestic product (GDP). What should you look out for? Keep track of its export performance now moving forward. A continued recovery means that the country is coming back up.

Taiwan: Sharp rebound as inflation concerns subside.

Taiwan, Taiwan, Taiwan. The ‘country’ that is part of China, but not really. Similar to South Korea, it is closely tied to the global technology cycle as it supplies every electronic and electrical product and technology for the U.S. and European markets. Its higher performance of 7.6% was driven mainly by technology (+10.5%), industrials (+8.7%), consumer discretionary (+8.2%), and energy (7.5%). At this juncture, there are just so many factors at play for Taiwan. On the positive, the AI trend will be driving demand for E&E products. However, on the flip side, China is on the horizon, both literally and figuratively, trying to claim Taiwan for its own. A war could be at hand with potentially the U.S. on Taiwan’s side.

Malaysia: The market was OK but the rest of Southeast Asia rose quite sharply (other than Singapore).

Malaysia rose by 0.7% for November 2023. Not bad, but not great either. You are talking about the region as a whole performing better than Malaysia like Indonesia (+4.9%), Philippines (+4.2%), and Vietnam (+4.1%). At the current stage, there’s just nothing that could provide a lift-off for Malaysia’s markets. Vietnam is primarily an export country, and so is Malaysia but it has performed better.

Indonesia exports tons of coal, palm oil and precious metals. Malaysia does too but not as much as Indonesia. China buys coal from Indonesia and, the U.S. and Chinese tech companies buy nickel from the country too. While I think it’s not sustainable for Indonesia to just export these things, at least it has something that the world wants. For Malaysia, I am afraid there’s nothing worth taking note of currently.