Asia Equities ex-Japan: Diverse growth drivers propel regional momentum

Asia equities ex-Japan continued the significant momentum from 2025, recording strong performance throughout the first half of 2026. Amid numerous catalysts, June Chua, Head of Asia Equities, outlines in this Mid-Year Outlook why she is constructive on the asset class for the remainder of 2026. Positive drivers include: potential geopolitical resolution in the Middle East and lower energy costs, supportive earnings and valuations, and differentiated growth drivers across the region.

• Asia equities have delivered strong year-to-date (YTD) returns amid various challenges. Earnings and valuations in Asian geographies remain supportive, with an overall positive outlook.
• We reiterate our constructive view of Greater China equity markets in 2026, supported by attractive valuations and resilient fund flows.
• Strong YTD performance in Korea and Taiwan have been a key driver for the upward trajectory of Asian equities. We currently maintain a high level of conviction in Korea’s technology and broader industrial sectors, as well as in Taiwan’s artificial intelligence (AI) supply chain. Additionally, incremental demand for domestic equities in both these markets is driven by local pensions.
• In India, we remain true to our 5D structural investment themes – Digitisation, Demographics, Deglobalisation, Decarbonisation, and Deficit Reduction – which capture the multidimensional nature of the country’s economic transformation.
• Equities in most ASEAN markets have underperformed their North Asian peers YTD. Despite the challenging environment, we believe coordinated efforts by governments, central banks and corporates are underway to navigate these headwinds.