SINGAPORE -- Investors have returned to Asian stock markets to seek post-pandemic opportunities as some of the region's economies start to recover, propelling Chinese internet names Meituan Dianping and JD.com to the biggest gains among big-cap shares this year.
Of the 55 Asia-headquartered companies that had market capitalizations of more than $50 billion as of the end of 2019, 23 had a higher value in dollar terms on Sept. 30 compared with the start of 2020, data from QUICK-FactSet shows. More than half, or 32, lost value.
Leading the gainers was Chinese food delivery provider Meituan Dianping, whose market capitalization rose more than 140% to $183 billion. Meituan's platform marked a daily average of 24.5 million order transactions in the second quarter, up 7% from a year ago, according to its interim report released early September.
Another beneficiary of the shift to at-home work and shopping was JD.com. The Chinese e-commerce group's market value roughly doubled to $118 billion.
China, the origin of the new coronavirus, emerged from the worst of the pandemic earlier than other countries. Investors rushed into Chinese stocks in July as macroeconomic data showed a better-than-expected recovery. Top e-commerce group Alibaba Group Holding rose sharply during the July-September quarter, with its market value surpassing $700 billion to become the highest in Asia.
Alibaba ranked sixth worldwide, behind Google parent Alphabet and ahead of Facebook .
Other stocks that performed well were top Indian conglomerate Reliance Industries, up 52% from end-December, Japanese gaming maker Nintendo, up 40% thanks to its popular Switch console game title Animal Crossing: New Horizons, as well as Taiwan Semiconductor Manufacturing Co., up 35%.
Outside the 55 big-cap companies, a rising star was Singapore-based online gaming and e-commerce company Sea, which saw its market value quadruple this year to over $70 billion, becoming Southeast Asia's most valuable listed company.
Meanwhile, traditional banks suffered. Indonesia's Bank Central Asia had its market value drop 24% this year as bad loans increased due to the pandemic-driven economic downturn.
Chinese state-owned energy giants China Petroleum & Chemical (Sinopec) and PetroChina recovered in the third quarter but their values remain more than 20% below the 2019 year-end levels due to weak oil prices.
In the manufacturing sector, Samsung Electronics and Sony regained the 2019 year-end level. Toyota Motor's market value rose 5% in the third quarter but is still 7% below the Dec. 31 level.
Asia's stock markets were hit hardest in March, with some major indexes falling more than 30% from the beginning of the year. Governments imposed lockdowns and rushed to monetary and fiscal stimulus to help buoy the economy, but recovery speed differed by markets: China, South Korea and Taiwan have had their stock indexes surpass end-2019 prices, whereas Japan, India, Hong Kong remained below the pre-pandemic levels.
Southeast Asian markets have also been underperforming its peers, with the Indonesia composite index and Thailand's SET dropping 23% and 22% this year, respectively. Weak macroeconomic prospects and lack of digital and technology stocks in the index components might have kept equity inventors away. Singapore's Straits Times Index also dropped 23% from the beginning of the year.
Looking ahead, upcoming companies' earnings for July-September quarter, which will be released over the coming weeks, will likely give investors an indication of how Asian companies have fared in the pandemic recovery phase. November's U.S. presidential election will also have an effect on Asian equities as the results determine Washington's stance toward China.
"Asian stocks may face a bumpy road ahead into the fourth quarter, with a second viral wave in Europe and political uncertainties surrounding the U.S. presidential election weighing sentiment," Margaret Yang, a strategist with DailyFX in Singapore told Nikkei Asia.
Yang pointed out that Asian stocks, except Chinese ones, have largely underperformed their U.S. peers this year. "Thus their relatively lower valuation may help to cushion the downside when U.S. markets consolidate," she said.
The strategist added that investors might continue to favor the technology sector -- so long as the coronavirus pandemic persists toward the end of the year.