Three stock markets have never returned to the peaks they achieved in the years before the Asian financial crisis triggered a region-wide sell-off two decades ago.
Japan’s Topix Index reached a record high in dollar terms in December 1989. On Tuesday, it was trading 29 percent lower. Thailand’s SET and Taiwan’s TWSE make up the trio of gauges that have failed to regain past glories since the 1997 crisis.
One market that has performed well is South Korea. The Kospi Index soared above its pre-crisis peak in 2006 and reached a new high the following year. Despite ongoing tension between the country and its neighbor North Korea, stocks continued to prosper, and reached a 10-year high on June 30.
The crisis had its origins in Asian economies that maintained pegged exchange rates and failed to control swelling private-sector dollar debt. When Thailand wasn’t able to maintain its currency fix and devalued, it set off an exodus of capital from the region, tipping nations into economic and in some cases political crises.
Hong Kong’s Hang Seng, India’s S&P BSE Sensex and NSE Nifty 50, Indonesia’s JCI Composite, the Philippines’ PSEi and Malaysia’s KLCI are among other indexes that have topped their peaks since 1997.