Most of the target markets have seen sustained foreign portfolio investments over the past few years, one of the key global financial trends in recent times. The US and Europe (primarily the UK) account for 50-75% of the net foreign inflows in each of these countries.
In the secondary markets, foreign institutional investors invested a net of US$49 billion in 2006. The investments total around US$62 billion, the highest for any emerging economic region.
"Global investors will likely continue to show their interest in Asian equities over the next three to five years, propelled by economic growth, high returns, technological developments, favourable regulatory changes, and the scope for development in these regions," says Prathima Rajan, analyst at Celent and co-author of the report.
Technology is emerging as a key differentiator for brokerages competing for business from institutional investors, "Whereas five years ago, e-trading had just started in Asia, brokerages and buy side firms are now using sophisticated proprietary systems and vendor systems," says Neil Katkov , managing director of Celent's Asia Research group and co-author of the report. "Brokerages are poised to introduce sophisticated e-trading capabilities even in emerging markets such as China and India."
The report highlights the factors driving this kind of growth in the Asia-Pacific region by analysing parameters like economic growth, high returns, regulatory changes, and technological advancements. Then we examine the trends pertaining to such growth in both primary and secondary markets. Each of the selected countries is studied as a potential investment market.