Global Equity Markets Primer: Core Concepts Handbook — From Developed to Emerging Markets, One Article to Master the Fundamentals of Overseas Stock Markets

Emerging markets represent the most volatile segment in global portfolio allocation—and also the riskiest. High growth invariably accompanies high volatility; this is a foundational understanding investors must internalize before investing in emerging markets. 5.1 Common Characteristics of Emerging Markets ・Primary sources of returns: (i) rising corporate earnings driven by demographic dividends, industrial relocation, and rapid economic growth; and (ii) valuation re-rating—long-term upward shifts in valuation benchmarks as markets evolve from immaturity toward maturity. ・Key risk features: high volatility and deep drawdowns; outsized gains during bull markets but even more severe losses during bear markets; strong policy uncertainty, with frequent regulatory and industrial policy changes; pronounced sensitivity to the U.S. dollar cycle—Fed hiking cycles often trigger sharp declines across emerging markets; and prominent currency risk, as most emerging-market currencies exhibit long-term depreciation trends. ・Investment principles: emerging markets should serve only as a satellite (i.e., supplementary) allocation—not a core holding—and position sizing must remain modest; never overweight. Investment must be made exclusively via index funds to diversify away idiosyncratic “black swan” risks—direct stock picking is strictly discouraged. Avoid chasing highs: extreme volatility means entering near market peaks may result in multi-year lockups. 5.2 Indian Equity Market: A Long-Term Bull Market Benchmark Among Emerging Markets ・Market infrastructure: home to two major exchanges—the Bombay Stock Exchange (BSE) and the National Stock Exchange of India (NSE)—with scale and liquidity ranking among the highest in the emerging-market universe. Foreign participation is substantial, making India a cornerstone destination for global asset managers allocating to emerging markets. ・Core trading rules: T+2 settlement; tiered daily price limits vary by stock; regulation is relatively mature, with a robust delisting framework; retail participation is high, yet institutional investors hold greater pricing power. ・Fundamental drivers of its sustained bull run: over the past decade-plus, India’s equity market has delivered a prolonged bull trend underpinned by four pillars: (i) demographic dividend—youthful population structure and vast domestic demand fueling sustained growth in consumption and services; (ii) industrial upgrading—global competitiveness in IT services and generic pharmaceuticals; (iii) persistent foreign capital inflows, cementing India’s status as a top-tier emerging-market allocation destination; and (iv) steady corporate earnings growth, providing fundamental support for long-term share price appreciation. ・Core sectors: information technology services, pharmaceuticals, consumer goods, and financials—constituting the four pillars of India’s equity market. ・Key risk factors: (i) persistently elevated valuations—especially during bull phases—making the market vulnerable to “double whammy” (Davis double-squeeze) corrections if earnings disappoint; (ii) high foreign ownership concentration, amplifying volatility during capital flight episodes—particularly during Fed tightening cycles; (iii) policy and geopolitical risks, including room for improvement in business environment stability and regulatory consistency; and (iv) long-term depreciation pressure on the Indian rupee, which continuously erodes returns for RMB-based investors. 5.3 Vietnamese Equity Market: A Frontier Growth Market Riding the Wave of Industrial Relocation ・Market infrastructure: anchored by the Ho Chi Minh Stock Exchange (HOSE, main board for large-cap firms) and the Hanoi Stock Exchange (HNX, for mid- and small-cap companies). The VN30 Index tracks the 30 largest stocks listed on HOSE, representing Vietnam’s core assets. Overall market size remains extremely small—even smaller than the market capitalization of a single A-share sector. ・Core trading rules: T+2 settlement; standard daily price limits on the main board are set at ±7%; foreign ownership caps apply across most sectors; retail investors dominate, resulting in highly speculative and extremely volatile market behavior. ・Core growth drivers: recent market performance has been propelled primarily by global manufacturing relocation—with Vietnam serving as a key hub for low-end manufacturing transfer. Coupled with a young demographic profile and low labor costs, export-oriented manufacturing has expanded rapidly, lifting both the economy and equity market. Rising household incomes have further bolstered domestic consumption. ・Core sectors: manufacturing & processing, real estate, consumer goods, and banking—dominated by low-tech manufacturing and domestic demand, with limited technological sophistication. ・Key risk factors: (i) tiny market size and weak liquidity—large inflows or outflows trigger sharp price swings; (ii) high policy volatility—frequent shifts in regulatory and foreign exchange policies heighten uncertainty; (iii) retail-driven, highly speculative market dynamics where violent rallies and crashes are commonplace; and (iv) persistent depreciation pressure on the Vietnamese dong.

Mumbai Has Overtaken New York, Hong Kong, and Shanghai

As shown in the chart above, in 2024 the National Stock Exchange of India (NSE) raised HK$154.1 billion through IPOs, with 258 companies listing. Both the total IPO fundraising amount and the number of new listings far surpassed those of Nasdaq, the New York Stock Exchange (NYSE), and the Hong Kong Stock Exchange (HKEX). In 2024, Nasdaq ranked second globally, raising HK$137.5 billion across 132 IPOs. The NYSE ranked third in terms of IPO proceeds. The NYSE and the Tokyo Stock Exchange (TSE) ranked fourth and fifth, respectively, in IPO proceeds. China’s three mainland exchanges—Shanghai, Shenzhen, and Beijing—failed to enter the global top five this year. Their respective IPO proceeds stood at RMB 33.5 billion, RMB 30 billion, and RMB 4.5 billion. This year, China’s three mainland bourses collectively hosted only 101 IPOs—a 68% decline year-on-year; total proceeds amounted to RMB 68 billion, down 81% year-on-year. The sharp drop in mainland IPO fundraising reflects subdued market conditions, prompting regulators to deliberately slow the pace of new listings. After all, IPO activity had been exceptionally frenetic over the prior few years. In both 2022 and 2023, the Shanghai and Shenzhen Stock Exchanges ranked first and second globally in IPO proceeds. In 2021, the Shanghai, Hong Kong, and Shenzhen exchanges ranked third, fourth, and fifth, respectively, in global IPO proceeds.

Indian Shares Open Flat After Fed Rate Hike; NSE IPO in Focus

5 days ago

Indian stocks opened flat following the US Federal Reserve's rate hike and elevated crude prices, with investor focus on the NSE IPO. Industry highlights include reduced windfall taxes on fuel exports and regulatory inspections for Alembic Pharma.

reuters

2026-05-15

India's Alembic Pharma quarterly profit rises on strong U.S. generics demand

2026-09-16

Indian Shares Open Flat After Fed Rate Hike; NSE IPO in Focus

Indian Shares Open Flat After Fed Rate Hike; NSE IPO in Focus

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