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Why it matters to you: Some of the best investment opportunities were found in unlikely places in North and Southeast Asia in 2023. Take note of their developments in 2023 to inform yourself of where they will go in 2024.

Guess which unlikely market in Asia performed the best? Taiwan and Japan. Taiwan is surprising to me because it continued to be embroiled in talks of war between it and China. Furthermore, the country also faced one of the worst export performances in 2023. Exports declined by an average of 11.2% in 2023 (January – November) compared to a positive growth of 8.7% in 2022.

The Land of the Rising Sun

And Japan.  I wrote about this before when Warren Buffet was bullish on the country. Even today, I am still surprised Japan got the spotlight it got in 2023. No doubt, it has managed to escape decades of deflation in recent times. Inflation increased to 2.9% in the years 2022 and 2023, compared to an average historical inflation of 0.2% (1995 – 2020). But the investor attention it got was massive. I suspect it had a lot to do with the AI boom currently happening. Japan boasts one of the highest-end technology when it comes to AI hardware and software.

Going Down to Southeast Asia

In Southeast Asia, two countries made the spotlight. Vietnam and Indonesia. Vietnam seemed to have benefited from the ongoing U.S.-China diplomatic and trade tensions. Many international companies in China are considering shifting their production to Vietnam. According to supplyia, fashion retailers like Bike and Adidas are shifting from China to Vietnam. In Indonesia, a boom in the demand for EV battery metals like lithium and nickel boosted investors’ interest. According to SimplyWallSt, the materials sector rose by 20.2% for the year.

Finally, to Malaysia

Lastly for Malaysia. It hasn’t been a great year. The market declined by 2.7% when not much had happened. That is probably the biggest concern investors had. It was the first year Prime Minister Anwar Ibrahim was in charge and he has championed bringing in foreign investment from China and the U.S. But that did not improve sentiments in the market. The fact remains that Malaysia’s prospects remain tied to commodity-based sectors like oil & gas and palm oil. According to SimplyWallSt, the materials and energy sectors declined by 7.1% and 2.5% respectively in 2023.