Standard Chartered on Monday signalled a stronger conviction in equities across Asia excluding Japan, raising the region to an "overweight" allocation at a briefing in Singapore. The bank said a combination of anticipated earnings strength, AI-driven investment and a potential easing of oil-supply concerns underpin its preference.
At the briefing, senior investment strategist Yap Fook Hien laid out the bank's view that Asia ex-Japan is positioned to record the most vigorous earnings growth among major markets in both 2026 and 2027. The bank attributes that expected outperformance in part to heightened AI spending and the central role of chipmakers in supporting corporate profits.
Within the region, Standard Chartered highlighted Taiwan and China as its top regional picks, followed by India. The bank cited Taiwan's leadership in chip manufacturing as a key reason for its favourable stance, while noting that China offers comparatively low valuations alongside demonstrated innovation strength. India's attraction was framed around growth driven primarily by domestic demand.
Standard Chartered's base case also envisions a resumption of shipping through the Strait of Hormuz within weeks. The bank said such a development could alleviate pressure on economies in the region that are dependent on oil imports.
Global Chief Investment Officer Steve Brice reiterated a broader preference for equities, stating the bank remains "overweight" global equities with a tilt to both U.S. and Asia ex-Japan markets. In fixed income and commodities, the bank expressed a favourable view of emerging market U.S. dollar bonds and gold.
Standard Chartered included specific market projections in its outlook, expecting the S&P 500 to reach 7,950 and forecasting gold to climb to $5,100 an ounce by mid-2027.
Market and sector implications
- Semiconductors and technology-related sectors stand to benefit from increased AI-driven capital expenditure and demand for chip manufacturing.
- Energy and import-dependent economies could be affected by changes in shipping flows and oil-supply dynamics tied to developments in the Strait of Hormuz.
- Fixed income and commodity allocations may shift toward emerging market U.S. dollar bonds and gold based on the bank's asset preferences.