The Asia-Pacific region experienced a significant surge in market capitalization, with the top 50 companies gaining US$550 billion in the third quarter ( Q3 ) of 2024, according to a recent study.

This growth was fuelled by China’s fiscal stimulus, strong domestic demand in India and Southeast Asia, and better-than-expected corporate earnings, underscoring the region’s resilience amid global uncertainties, finds the study by data and analytics company GlobalData.

At the end of Q3 2024, the combined market value of the companies in the Asia-Pacific technology sector, the study notes, reached US$3.3 trillion, while those in the financial services sector totalled US$527.4 billion. Among the top 50 companies, 19 were from the technology sector. In terms of geographic distribution, 19 companies were based out of China, 15 from Japan and seven from India.

“Asian stocks surged in late September following the announcement of a comprehensive stimulus package by the Chinese policymakers,” says Murthy Grandhi, GlobalData’s business fundamentals analyst. “While individual measures, such as interest rate cuts and reduced downpayment requirements for home purchases, have been introduced over the past year, the coordinated nature of September’s initiative marked the strongest indication, yet Beijing is committed to bolstering the Chinese economy and stabilizing the stock markets.

“The Bank of Japan ( BoJ )’s July rate hike, coupled with governor Ueda Kazuo’s signals of further increases, was swiftly followed by weak US labour market data. As the interest rate gap between the US and Japan narrowed, the Japanese yen strengthened significantly, triggering a rapid unwinding of many ‘carry trades’ that had benefited from low Japanese borrowing costs. A more reassuring stance from BoJ officials later helped Japanese stocks recover some of their losses.”

China gainers

Companies that witnessed significant gains include Chinese food-delivery giant Meituan, which experienced more than 50% quarter-on-quarter growth in its market capitalization, the study points out, owing to the stronger-than-expected quarterly results and share buybacks.

Alibaba Group’s market valuation soared by 46.2% during the quarter, following the announcement of the completion of a three-year regulatory “rectification” process. This development came after the company was fined for monopolistic practices in 2021 as part of an antitrust investigation.

The shares of China Life Insurance saw a 46.1% increase in market capitalization, driven by the company’s strong interim financial results.

“The Chinese constituents in the top 50 Asia-Pacific companies list witnessed a 18% increase in market value, driven by the announcement of China’s fiscal stimulus package,” Grandhi adds. “Oil majors CNOOC and PetroChina experienced market capitalization loss of 12.3% and 10.3%, respectively, owing to a slump in crude oil prices.”

South Korean losers

Chipmakers SK Hynix and Samsung Electronics, the study points out, experienced significant declines in market value, dropping by 22.2% and 20.1%, respectively. These losses reflect concerns over a potential oversupply in the market, despite the low probability of this occurring.

Additionally, Samsung is facing challenges in maintaining its lead in high-bandwidth memory ( HBM ) chips, a crucial component in artificial intelligence ( AI ) processors, as domestic competitor SK Hynix's latest HBM products are reportedly undergoing testing for possible integration into processors from leading AI-chip maker Nvidia.

Looking ahead

“Into Q4 2024, Asia-Pacific companies could be keenly keeping an eye on the monetary policies of their respective countries, with interest rates likely to be cut down, albeit not to the extent of the recent US Fed rate cuts,” Gandhi concludes. “Additionally, the ongoing Middle East crisis could disrupt the market, affecting investor confidence and business strategies.

“However, Asia-Pacific’s resilience, driven by innovation and supply-chain strengthening, will help them in navigating these uncertainties and in sustaining the growth story.”