What are we tracking? An overview of Asian indices
April 18, 2007Thanks for visiting! If you like what you're reading, you may want to subscribe to my RSS feed.
By now, we have covered an extensive list of indices and I have decided not to cover anything too exotic like South-American or African. The reasons for this are fairly simple: I’ve collected all this information to make it easier for me (and others) to judge which indices might possibly yield the best return in the long(er) run. However, we may also not forget that we have to find index funds which are actually covering those indices, i.e. the more exotic it gets, the harder it is to find appropriate funds and the more expensive the fund’s fees will be. Therefore, I will stop - after looking at major Asian indices - and return to our original investigation of investment possibilities…
But before then, here’s a brief overview of Asian indices:
- Hong Kong: The Hang Seng (HSI) is a capitalisation-weighted stock index for the Hong Kong Stock Exchange. It covers the 36 leading companies listed and represents about 65% of the overall capitalisation on the Hong Kong Stock Exchange. The Hang Seng is a rather old index - started in 1969 - and is maintained by a subsidiary of Hong Kong’s second largest bank (Hang Seng Bank - in case you were wondering). It has grown by 90.28% in the last 5 years.
- Japan: Japan’s main stock index is the Nikkei 225 and together with the Dow Jones and the FTSE 100 it is probably the most commonly quoted stock index with investors. The index is price-weighted and contains Japan’s 225 largest companies (well, those that are listed on the Tokyo Stock Exchange…). The Nikkei includes an interesting variety of industry sectors including bus companies, fishery, precision instruments and shipbuilding. It reached its all-time high in December 1989, but has grown a respectable 58.42% in the last 5 years.
- China: The Shanghai Composite Index is the oldest stock benchmark for the Chinese securities market and covers all stocks traded on the Shanghai Stock Exchange. It has grown by 47.4% within the last 5 years, even though most of this growth can be attributed to the previous 2 years as you can see nicely in the chart below.
- India: The BSE Sensex (unfortunate acronym for Bombay Stock Exchange, which is the oldest stock exchange in Asia) is a value-weighted index of the 30 largest and most actively traded stocks on the Bombay Stock Exchange. It’s base was set to 100 in April 1979 and since then the index has been growing at a rate of roughly 27% per annum (~18% per annum after compensating for inflation). Between 2002 and 2007 it grew by an astonishing 400.88% - and trust me, I’ve done the Maths twice to double-check that result! The index, which is also called BSE30 is currently quoted at 13,384 points.
I’m too busy marveling at that phenomenal growth rate to come up with a decent closing sentence. The good news is, we’ve completed our research on (readily) available indices now and can thus draw conclusions - Top 5 list in the pipeline! I know who’s gonna be first… 
Read the last part of “What are we tracking?” on the top 5 indices >>
