Abstract:
The stock exchanges in Asia and across globe have experienced important changes
since the mid-1990s. Most traditional stock exchanges have either been acquired by
another exchange or become part of a stock exchange group. In most cases the parent
companies of exchanges have also become public companies with their shares listed
and traded on one or more of their own stock exchanges. Stock exchanges in developed
Asian economies have also been part of this transformation. The increase in Asian
capital markets activity since the year 2000 has triggered several national and regional
initiatives aiming to increase integration within regional and global capital markets.
Asia’s near-term outlook is projected to remain solid, helped by a stronger global
economy and broadly accommodative policies and financial conditions. Hence a need
to study the trends of the Asian stock markets and their level of integration within
themselves was identified. Further an attempt was made to identify if the Asian markets
have potential for international portfolio diversification. Keeping in view the objective
stock markets of India, Japan, China, Hong Kong and Singapore were taken for the
purpose of the study. The monthly closing prices of the stock indices of BSE Sensex,
Nikkei225, SSE Composite, Hang seng index and Straits Times Index (STI) were
collected over the time period from January 2008 to December 2017.The Findings of
the study reflect that the selected markets are efficient markets, India and Singapore
markets have greater potential for international portfolio diversification and all the
Asian markets are highly integrated.
