Think of investing in Asia and markets like China and India immediately spring to mind. China seems to be preoccupying everyone. And why would it not with the Shanghai Composite Index more than doubling over the last 12 months, thanks largely to nearly 90 million retail investors. Their hunger for a piece of the action has caused share prices to skyrocket.
However, things are not looking so rosy at the moment. In February, the Shanghai Composite tumbled 9%. And after hitting another record high on May 29, the extremely volatile index has lost almost 7% as of June 8. Some analysts are anticipating yet another sharp correction. Norman Chan, director of PCM Capital Limited says, “We expect Shanghai to find major support at around 3,300, but at the moment there still is five to eight percent further downside.”
For investors, who are less than thrilled to ride the Chinese stock market rollercoaster, the good news is, that you have options – very good ones at that.
In fact, many investors are already channeling their funds out of markets like China and into ‘safer havens’. Malaysia and Singapore are the top two beneficiaries of this capital outflow, capturing just over US$1.6 billion worth in investments. The Straits Times Index hit a fresh high of 3579.35 points on 4 June while the Kuala Lumpur Composite Index hit a record 1372.38 points just this past Thursday (7 June). Both indexes have gained more than 40% over the past 12 months.