South Korea’s growth in the third quarter was at its quickest rate in more than seven years, accompanying China and Singapore in reporting faster growth during the September quarter, reports Gillian Murdoch for Reuters. (How to capture China’s growth).

• iShares MSCI South Korea Index (NYSEArca: EWY)
• iShares FTSE/Xinhua China 25 Index (NYSEArca: FXI)
• iShares MSCI Singapore Index (NYSEArca: EWS)

Japan, Singapore, Hong Kong, Thailand and Taiwan all officially exited a recession in the second quarter.

• iShares MSCI Japan Index (NYSEArca: EWJ)
• iShares MSCI Hong Kong Index (NYSEArca: EWH)
• iShares MSCI Thailand Invest Mkt Index (NYSEArca: THD)
• iShares MSCI Taiwan Index (NYSEArca: EWT)

Japan, however, grew 0.6% in the second quarter – less than expected. (Small-cap plays for Japan).

Singapore’s economy expanded in the second quarter at its fastest rate in almost six years, as a result of a surge in biomedical production and construction. (Sectors pushing Singapore’s growth)

Hong Kong pulled out in the second quarter after its economy grew at a faster-than-expected 3.3% from the previous quarter. (Is Hong Kong facing a correction?)

Thailand’s economy grew 2.3% in the second quarter from the first quarter on a recovering manufacturing sector. (Reasons to watch Thailand)

Taiwan’s economy saw growth for the first time in a year during the second quarter. Officials expect rising demand from China to support the island’s recovery. (Why Taiwan’s heating up).

• iShares S&P Asia 50 Index (NYSEArca: AIA)
• BLDRs Asia 50 ADR Index (NasdaqGM: ADRA)

For more information on Asia, visit our Asia category.

Max Chen contributed to this article.

Carl Delfeld explains that he uses country-specific ETFs as a portfolio core, complemented with global sector ETFs. Among the many benefits of global investing include:

• Country-specific ETFs make it easy to access foreign economies, especially those that have limits on foreign investment
• Global ETFs give true and diverse exposure to the local economy, making them indispensable to every portfolio
• Gains by U.S. investors in overseas markets have enjoyed a “dollar kicker” when assets are repatriated to U.S. dollars
• Country-focused ETFs are a good way to aim a portfolio at weighting countries more on growth potential rather than market capitalization; this way, any growth potential is harnessed and none of those gains are left out
• Single country funds also make plays upon other areas; for example, Australia can give good exposure to commodities, and is in the position to spot most of China’s growth; Singapore’s ETF also has high exposure to industrials and telecommunications
• By using the single-country ETFs, it is possible to challenge the larger conventional indexes, and still garner the diversification and gains.

Delfeld cites Australia and Singapore as good examples of single country funds that have weathered the recession quite well. Singapore is a high-quality market at the center of Asia’s growth. GDP grew 14.9% annualized in the third quarter. Australia is benefiting from an upbeat mood among its denizens.

For more stories about global ETFs, visit our global ETF category.

• iShares MSCI Australia Index (NYSEArca: EWA): up 74.7% year-to-date

• iShares MSCI Singapore Index (NYSEArca: EWS): up 57.3% year-to-date

Singapore’s exports dropped the least in 11 months in August with non-oil domestic exports dropping only 7.1% year-over-year, compared to 8.7% in July, reports Shamim Adam for Bloomberg. Non-electronic exports, including petrochemicals and pharmaceuticals, diminished 2.8% in August year-over-year, compared to 4.8% in July.

Increased demand for pharmaceuticals, especially on vaccinations for the H1N1 virus, and electronics has allowed companies to project higher sales.

Exports to the United States, the largest importer of Singapore’s goods, plummeted 21.4% year-over-year and exports to the European Union dived 26.7%, reports Se Young Lee for The Wall Street Journal. Shipments to China only dropped 5.3% in August year-over-year.

The seasonally adjusted unemployment rate remains unchanged at 3.3%, writes Shamim Adam for Bloomberg. The government has engaged in handouts to companies to help with wage costs and to prevent job loss.

The National Trades Unions Congress expects joblessness to peak at 4.3% while the United Overseas Bank projects Singapore’s unemployment rate could reach 3.8% at the end of the year.

• iShares MSCI Singapore Index (NYSEArca: EWS): up 50.3% year-to-date

For more information on Singapore, visit our Singapore category.

Max Chen contributed to this article.

Healthy company reports, new hiring, impressive stock market rallies and other economic data streaming in from Singapore, the Philippines, Australia, Japan and China are providing a strong basis that the region could outpace the recovery in the West, reports Bettina Wassener for The New York Times. Not all countries are recovering at the same pace, though.

• China is just one example of a country that has made a successful post-crisis turnaround. In July, its industrial output increased 10.8% year-over-year and retail sales jumped 15.2%. The government expects a 8% growth in GDP and economists estimate a 11.9% expansion in 2010.
• On the other hand, Japan remains deeply in a recession. One economist says the country has seen a short-term rebound, but long-term prospects are still up in the air.

Asia has been supported by a relatively stronger financial system since banks in the region did not deal in the complex financial instruments that caused the collapse in Western banks.

However, Asia’s recovery has depended heavily on government stimulus. Exports also remain depressed and a drawn out downturn in the West could be problematic for Asian countries that rely on exports.

• BLDRs Asia 50 ADR Index (ADRA): up 27.4% year-to-date

• iShares S&P Asia 50 Index (AIA): up 43% year-to-date

For more information on Asia, visit our Asia category.

Max Chen contributed to this article.

The Singapore ambassador to the U.S. claims that the recovery from the economic slump will occur in east Asia when the U.S. rebounds, reports Tom Parsons for Forbes. The East Asian region still relies heavily on exports, and the United States is a voracious importer. The IMF estimates that the Singapore’s economy could contract up to 10% this year.

The Purchasing Manager Index showed a 51.1 in June for Singapore’s manufacturing industry, readings above 50 indicates the manufacturing economy is expanding, as stated in PRWeb. Trade and Industry Minister Lim Hng Kiang stated that the country is committed in growing its manufacturing industry, a key contributor to the country’s economic performance.

Growth in key pillars of the manufacturing industry include:

• Electronic sector. The electronic index increased 2.1 points over the previous month to expand to 55. It indicated higher levels of new orders from both domestic and foreign markets.
• Aerospace sector. Aerospace engine manufacturer Rolls Royce showed its confidence in Singapore’s aerospace sector by relocating its supply chain into the country. Singapore is Asia’s major aerospace maintenance, repair and overhaul provider.
• Clean energy sector. The government has identified this as a key growth area, especially in solar energy. It has been announced that a $350 million investment will be made into the sector to increase research and development and capability development.
• Biomedical sector. The biomedical manufacturing sector increased 120.4% year-over-year in May, mostly because of a 138.6% jump in pharmaceutical output.
• Oil sector. Shell invested in a new $3 billion petrochemical cracker complex that is slated to start up in Singapore in end of 2009. It will be Shell’s largest refinery worldwide with production capabilities of 500,000 barrels a day.
• Water sector. During the Singapore International Water Week, local firms won some billion-dollar contracts, ranging from building desalination plants, or equipment such as pumping systems and pipe networks, to exchanging expertise in membrane-based water treatment technologies.

• iShares MSCI Singapore Index (EWS): up 27.2% year-to-date

For more information on Singapore, visit our Singapore category.

Max Chen contributed to this article.

Singapore’s manufacturing sector is the backbone of its trade-led economy, with the bulk ending up as shipments to the world’s major markets such as the United States and other industrialized nations. The lowered global demand had taken its toll on the Asian nation, explains the Associated Press.

Shamim Adam and Chan Sue Ling for Bloomberg report that Singapore joins other Asian nations in showing signs it may be past the worst of its yearlong export slump. Meanwhile, The Bank of Japan may raise its assessment of the economy for the first time since July 2006, even after a report showed a record contraction in the first quarter, economists say.

• iShares MSCI Singapore Index (EWS): up 27% year-to-date

It is unlikely that the Asian tigers will be returning to large growth rates of years past and domestic demand alone could show growth of almost 7% in emerging Asia, according to The Economist. Economists now expected that China may have GDP growth of 8%.

Growth in smaller, export-driven economies such as Hong Kong, South Korea, Singapore and Taiwan could remain more moderate. Global demand still makes up a large factor for these countries and rising unemployment will reduce consumer spending.

• iShares MSCI Hong Kong Index (EWH): up 25.5% year-to-date
• iShares MSCI South Korea Index (EWY): up 32.1% year-to-date
• iShares MSCI Singapore Index (EWS): up 27% year-to-date
• iShares MSCI Taiwan (EWT) is up 40.2% year-to-date

The IMF projects a 1.6% growth in 2010 for smaller emerging Asian countries, but other economists suggest smaller Asian economies could grow up to 4% or even 7% once China and India start going.

• iShares FTSE/Xinhua China 25 Index (FXI): up 21.6% year-to-date
• WisdomTree India Earnings (EPI): up 47.7% year-to-date

The previous downfall of Asian economies is largely blamed on the high savings and low spending rates within the countries, or it can be attributed to the cyclical economic forces that the large manufacturing sectors are now facing. But Asian economies that dropped the steepest as a result of heavy reliance on manufacturing could see a drastic recovery when the time comes.

Fiscal stimulus plans, mostly 4% of GDP, in Asia were larger than in any other region, and so far the big push appears to be paying off. And thanks to low consumer debt, government cash handouts in Asia are also more likely to be spent than saved, which will further fuel domestic demand. Asian banks are in a better position to support increased domestic spending.

Max Chen contributed to this article.

In Harvard’s top U.S.-listed holdings for the end of the first quarter, the most copious amount of U.S.-listed equity holding by a wide margin was in iShares MSCI Emerging Markets Index (EEM), writes Carl T. Delfeld for Seeking Alpha.

• iShares MSCI Emerging Markets Index (EEM): up 27.2% year-to-date

This has been a growing trend, with more investment interest in individual emerging markets. Harvard isn’t stopping with just EEM, either. The endowment is also increasing its allocation to funds focused on China, Brazil, India, Mexico and South Africa.

Why are emerging markets so attractive these days? The sentiment toward them has been lifting gradually lately, reports Nick Godt for MarketWatch. Yesterday’s performance in India only furthered the good feelings toward those markets. Some caution that the rally might be overdone, so be sure to watch the trend lines for hints.

A potential trader may look at the whole of the emerging markets through ETFs such as EEM, or one may pick out individual countries to satiate one’s investment pangs.

Current emerging markets above their trend lines include:

• SPDR S&P China (GXC): up 27.3% year-to-date

• iShares MSCI Taiwan Index (EWT): up 40.1% year-to-date

• iShares MSCI Singapore Index (EWS): up 24.3% year-to-date

• SPDR S&P Emerging Europe (GUR): up 29.9% year-to-date

• iShares MSCI Mexico Investable Mkt Idx (EWW): up 12.6% year-to-date

• Market Vectors Russia (RSX): up 59.3% year-to-date

For full disclosure, some of Tom Lydon’s clients own shares of GXC.

Max Chen contributed to this article.

The International Monetary Fund (IMF) estimates a 10% decline in Singapore’s GDP, reports Fiona Chan for The Straits Times. Economies in the Asia-Pacific region are being downgraded by the IMF because of these countries’ open economies and reliance on their manufacturing industries.

Singapore’s economy contracted 16.4% in the fourth quarter compared to the same period in the previous year, and shrunk another 19.7% in the first quarter of this year.

The 11-month slump in Singapore exports has led to increased unemployment, which forced the government to cut taxes and subsidize jobs, writes Shamim Adam for Bloomberg.

The Central Bank will adjust the trading range for their currency and this adjustment is expected to devalue the exchange rage. The country’s monetary policy will remain appropriate and not in response to short-term data.

This island nation is starting to cater toward the region’s wealthy with a global gourmet gathering, luxury boat show and a fashion festival, remarks to Miral Fahmy for Reuters. Singapore is revamping itself as a it spot for international and regional fashion designers.

Meanwhile, the country’s ETF has been trading higher in recent days (although yesterday it dropped 5.5%), and is 7% above its 200-day moving average.

• iShares MSCI Singapore Index (EWS): up 20.9% year-to-date; up 24% in the last two weeks

Max Chen contributed to this article.

Those who follow Asian markets know that Japan is the big dog when it comes to ETF products. In fact, some believe that there is too much overlap between products offered on the Tokyo Stock Exchange.

For example, there are three ETFs that track that the Nikkei and three ETFs that track the Topix.  Japan is somewhat of a complex place.  It is very difficult to cross-list ETFs in Japan, states Paul Hoff, managing director of FTSE for the Asia-Pacific markets, in an interview with Rita Raagas De Ramos of Asian Investor.  For this reason, FTSE is introducing the first theme-based ETF in Japan.

In regard to other regions of Asia, FTSE will be introducing a new thematic ETF in Malaysia on plantations.  This will be launched on FTSE’s custom index that it launched for Malaysia.  China will be an interesting market to keep an eye on as well.  The Shanghai Stock Exchange has a nice initiative to get foreign ETFs listed on the domestic market.

Taiwan has recently opened up a whole new can of competition for ETFs opening to its doors to ETF providers, which was once exclusive to FTSE.  This enables many investors to have several ETF options and a diversified portfolio.

One problem that is systemic in Asia is the regulations that stem across borders.  In some nations, the regulations make it lax for ETFs to launch, such as Singapore and Malaysia.  In others, there are a lot of challenges, such as in Taiwan and the Philippines.

A second problem that arises in Asia is the difference in time zones in which the stock exchanges trade.  The Association of Southeast Asian Nations (ASEAN) is trying to alleviate this predicament by establishing an ASEAN board where investors from different countries can invest across each of the markets.  This will be tough to get running, though. One major problem that investors will have to overcome is the limitation of funds that can be invested outside of  his home country, which is a regulation imposed by the majority of Asian nations.

Kevin Grewal contributed to this article.