The year 2021 was a good year for major stock markets in South Asia. Compilation of indices ending the first trading week of the new year shows 2022 should be good also. Major stocks markets in the region have seen good beginnings. Is morning showing the day? 

Let us give a look at major South Asian stocks as of January 7.

In Sri Lanka, main index ASPI closed at 13,280.94 points, up 5.18 percent over the week, Nepal’s NSPE closed at 2672.61 points, up 4.29 percent, Bangladesh’s benchmark DSEX-30 saw weekly increase of 3.42 percent to close at 6,987 points. In Pakistan, benchmark KSE-100 closed at 5,345.65 points, up 1.68 percent weekly. The first week of the new year ended for Sensex, the Indian benchmark, at 59,744.65, up 0.24 percent over the week. With heavier weight of Indian market, a relatively lower rate of increase is not irrational there compared with to smaller neighbouring markets. 

Now let us revisit the annual changes in South Asian markets in 2021. Bangladesh’s benchmark index DSEX-30 increased by 25.08 percent in 2021, Sri Lankan benchmark rose by 80.5 percent, the Indian major index Sensex gained 22 percent year on year, Nepal’s NPSE was up more than 17 percent and in Pakistan benchmark KSE-100 rose by only 1.9 percent in the past year.

Global fund managers and economic analysts across the world had already said that the year 2022 would be better for most of the South Asian markets. They pointed out that businesses and industrial sectors in this region of Asia would get stronger this year as Covid situation eases.

Now omicron strain of virus is spreading fast in India and other South Asian countries but market observers still hopeful about a stronger 2022 for stocks. The number of deaths caused by omicron still much lower compared to that of the previous two big waves of Covid-19. People in region are not afraid of virus so much as they had been during previous waves. People are more interested now to continue normal economic life. So hopes now are stronger.

Earlier, the Hong Kong based Asia Frontier Capital-AFC said that in Bangladesh and Sri Lanka 2021 was good year for small and mid-cap stocks but large-cap stocks might be doing better in 2022. The AFC 2022 forecast also noted that Bangladesh market has strong fundamentals in tradable shares, so investors have rooms here to pour money and take returns.

Global analysts also included Sri Lanka and Pakistan, where reasons are there for rational boosts in stocks. Revival of domestic markets and strong demands at the export-oriented industries here are among the reasons. Bangladesh's garment factories are now flooded by orders from the US and EU importers. So, forecast of cross border analysts has ground to optimistic. Let us wait and see how the stock markets actually behave in 2022.

The writer is a Dhaka-based broadcast journalist and she writes on economic affairs. E-mail: [email protected]