Investing In Emerging Belt & Road Initiative Stock Markets: South-East Asia

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Building An Investment Portfolio In Cambodia, Indonesia, Laos, Malaysia, Myanmar, Philippines, Thailand & Vietnam

Op/Ed by Chris Devonshire-Ellis

With China’s Belt & Road Initiative gaining much attention due to the vast financial spend across regions, it makes sense to start to examine how that expenditure will impact on listed companies, some of them direct participants, on stock exchanges throughout the Belt & Road Initiative.

Projections of how much China has actually invested differ. Morgan Stanley have estimated that the total spend by 2027 will reach US$1.2 trillion, while Moodys Analytics put the total spend at US$614 billion at the end of 2018. To put this into context, the United States has stated it will spend US$2 trillion on supporting the American economy due to Covid-19.

Whatever the figures, the results should be the same: Infrastructure investment into BRI countries could be reasonably expected to show up later as improvements in the performances of certain local businesses in industries impacted by such projects. Obvious candidates as improved infrastructure enhances trade are banks, rail, road, air and port operators, certain retail outlets and logistics companies, and especially those which have some element of Government ownership.

In this series of articles, we will examine the various regional exchanges, identify some of the key players and look at the possibility for foreign investors to get involved.

In terms of regulatory and professional oversight, the emerging South-East Asian countries have some way to go, although these countries are part of ASEAN and can take advise and regulatory standards from countries such as Singapore and the ASEAN secretariat.

However where to list provides a conundrum; whether to go through all the regulatory and compliance mechanisms to list locally, and attract local investment capital, or to do exactly the same and list on the Singapore bourse and its access to international finance. There are reasons to do both; one to raise local capital for local expansion, and to prepare later for a Singapore listing. In essence, this indicates that local stocks may be a precursor to larger, pan-Asia and global roll outs. All developing businesses have to start somewhere, and having local Governmental approval is always a political strength that can be used when assessing wider market development.

Several of the South-East Asian bourses are members of the ASEAN Exchanges; a collaboration of various exchanges from Indonesia, Malaysia, Philippines, Singapore, Thailand and Vietnam. This entity exists to promote the growth of the ASEAN capital market by bringing more ASEAN investment opportunities to more investors.

The collaboration is working with partners to build greater liquidity amongst members by:

  • Streamlining access to and within ASEAN
  • Driving cross border harmonisation
  • Creating ASEAN centric products and implementing targeted promotional initiatives
  • Improving efficiency among member exchanges.

Some have also partnered with the World Federation of Exchanges, representing over 250 market infrastructure providers, including standalone CCPs that are not part of exchange groups.

Our previous articles concerning emerging Belt & Road Initiative influenced stocks can be found here:

We examine the emerging South East Asian stock exchanges below.

Cambodia is becoming increasingly well connected to China, as it possesses an important Port at Sihanoukville opening out onto the Gulf of Thailand, thus providing maritime access to South East Asia and India, a facility that China itself doesn’t have.

Indonesia is a rapidly growing Asian economy and is developing simultaneously as a competitive manufacturing base and a significant consumer market.

Laos is a mountainous, landlocked country sharing borders with China, Thailand and Vietnam, its main trade partners.

Malaysia is one of the Asian tigers, with a sound manufacturing base and significant consumer market.

Myanmar is very much an emerging market. It is strategically positioned but remains somewhat backward in human capital. Nonetheless, foreign investment is flowing in and infrastructure standards beginning to improve, although internal security problems still remain.

The Philippines is an Asian tiger, with rapidly developing light manufacturing and services sectors, and a growing consumer base.

Thailand is an Asian Tiger and a significant manufacturing hub and consumer market, with a buoyant tourism industry.

Vietnam is an Asian tiger economy and has been attracting a lot of foreign investment previously in China due to its competitive manufacturing costs and increasingly viable infrastructure. It is also an emerging consumer market.

There are two main exchanges, being the Hanoi Stock Exchange (HNX) and the Ho Chi Minh Stock Exchange, or HOSE. From 2020, HOSE will become the main Vietnamese stock exchange, while the HNX will issue Bonds.

Foreign participants should be aware that the key to investing isn’t to look at pre-existing fundamentals and performance, the key to investing is working out as best you can what is likely to happen in the future. Examining shareholder meeting discussions and looking at obvious market progression, both domestic and regional and the probability of this happening, is a research issue. Which is why Silk Road Briefing is a useful tool. A subscription can be obtained here.

The stock exchanges listed above are all emerging markets in ASEAN. Readers may also refer to and subscribe to our related  ASEAN Briefing as a source of ASEAN business and investment intelligence.  For obvious reasons we recommend caution when investing in stocks and shares in these emerging markets. We make no recommendations, risks are those of the reader alone.

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Silk Road Briefing is published by Dezan Shira & Associates. The firm was established in 1992 and has 28 offices throughout Asia, including the ASEAN countries of Indonesia, Malaysia, Philippines, Singapore, Thailand and Vietnam, in addition to 12 offices across China and three in India. We assist foreign investors throughout the region. Please contact us at or visit us at