"By 2030, we expect Asian equity markets to represent almost 50 per cent of world market capitalisation and Asian domestic bond markets to be bigger than the US bond markets," according to the 'Super-Cycle Report' by British banking major Standard Chartered.
The equity-market capitalisation for Asia, ex-Japan, is expected to rise from USD 7.4 trillion currently to around USD 151 trillion by 2030, half of which could be attributable to China, expected to have a market capitalisation of around USD 79 trillion.
Equity markets of India, South Africa, Indonesia, China and Brazil are projected to expand at a compound annual growth rate (CAGR) of around 15 per cent over the next two decades.
With the Asian financial markets – in particular those of China and India – growing substantially, centres such as Hong Kong and Singapore to emerge as even bigger hubs for regional and global products.
"Other locations, such as Shanghai, Mumbai and Dubai, to become bigger financial centres for regional products," the report added. With Asian financial centres becoming more important, Asian debt and foreign exchange markets are also set to grow strongly.
In the next two decades, China, Brazil and India are all set to become the three major players in the forex market, besides top 10 economies. China is expected to have a daily turnover of USD 6.2 trillion, Brazil (USD 2.5 trillion) and India (USD 1.9 trillion) in 2030, the report said.
The study said that the higher a country's per-capita income, the more sophisticated and developed its financial markets are likely to be. Besides, economic reform, privatisation and financial innovation would contribute to the growth of equity markets in Asia, it added.
It also said that increasing capital requirements and a structural shift to savings would drive growth in emerging market equity markets.