May 31, 2017 10:00 pm JST

Nikkei Asia 300 Index marks six months with 17% rise

Tencent logs biggest gain in market cap among composite stocks

KENTA SHINOZAKI, Nikkei staff writer

Tencent Holdings' WeChat app had 937.8 million users at the end of March 2016, an increase of 180 million from a year earlier. © Reuters

TOKYO -- The Nikkei Asia300 Index, tracing some 300 of Asia's must-watch listed companies, marked its first six months on Thursday with a 17% gain since its debut.

The Nikkei Asia300 Index stood at 1229.14 on May 31, while the index started at 1052.97 on December 1 last year.

The index has thus outpaced a 12% gain logged by stocks in advanced economies. It scored a record high last Friday.

Of the composite stocks, Tencent Holdings of China and other information technology companies have shown significant gains, thanks to the rapid process of digitization in Asia.

The Nikkei analyzed gains in dollar-denominated market capitalization scored by the composite stocks from the index's debut on December 1 until the end of May. Market capitalization represents the market value of a company, calculated by multiplying its stock price by the number of outstanding shares. 

Tencent, a leading Internet service company, posted the biggest gain at $96.5 billion, comparable with NTT's market capitalization of 11 trillion yen ($99.2 billion). The market value of Tencent has consistently risen since the start of 2017, resulting in an 29% increase over the past six months.

The WeChat messaging platform, operated by Tencent, had 937.8 million users as of the end of March, an increase of 180 million from a year earlier.

Paid services such as games delivered via WeChat and smartphone-based account settlements have contributed to Tencent's strong earnings. With WeChat developing into as an element of infrastructure for citizens, the company has attracted investors looking for growth companies.

Samsung Electronics registered the second biggest increase -- $53.5 billion in market capitalization, larger than Sony's market value of 5 trillion yen ($45.1 billion). 

The semiconductor business, Samsung's main cash cow, booked an operating profit of 6.3 trillion won ($5.63 billion) in the January-March period, setting a new high for the second consecutive quarter in a row.

With demand for equipment compatible with 5th generation wireless standards emerging next year, the market for memory chips is expected to remain buoyant for some time, according to South Korean brokerage house SK Securities. The expectation is shoring up the price of Samsung stocks.

Taiwan Semiconductor Manufacturing Co., the world's largest semiconductor foundry, boosted its market capitalization by $29.4 billion. Based on an exclusive orders won since last year to supply central processing units for Apple's iPhones, the company is expected to set a new high in net profit for the sixth straight year in the current business year through December.

Many Asian stocks have been rising at an accelerating pace since the start of this year as excessive expectations surrounding the economic policies of U.S. President Donald Trump have subsided. Concerns about outflows of investment from emerging economies to developed countries have weakened.

Investors are buying back Asian stocks on a broader basis against the backdrop of rebounding prices of natural resources and increasing exports from Asian countries.

Rises in Asian stocks are being led by foreign investors. According to Goldman Sachs Group, foreign investors have so far been net buyers in the amount of $27.6 billion since the start of 2017. That is after a net sale of $11.8 billion worth of shares of companies in emerging Asian economies in the October-December period of 2016 

Asia300

Tencent Holdings Ltd.

China

Market(Ticker): HKG(700)
Sector:
Industry:
Technology Services
Internet Software/Services
Market cap(USD): 340,505M
Shares: 9,478.03M
Asia300

Samsung Electronics Co., Ltd.

South Korea

Market(Ticker): KRX(005930)
Sector:
Industry:
Electronic Technology
Telecommunications Equipment
Market cap(USD): 304,277M
Shares: 149.31M
Asia300

Taiwan Semiconductor Manufacturing Co., Ltd.

Taiwan

Market(Ticker): TAI(2330)
Sector:
Industry:
Electronic Technology
Semiconductors
Market cap(USD): 185,107M
Shares: 25,930.4M

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