Standard Chartered Upgrades Asia ex-Japan Equities to Overweight, Favoring Taiwan and Mainland China Markets
Taylor Wilson
Standard Chartered raised Asia ex-Japan stocks to overweight, citing the region's top-ranked earnings growth outlook for 2026–2027 — driven by AI spending and the semiconductor supply chain — a clear signal to add exposure for investors with Asia-Pacific positions.
Why upgrade Asia-Pacific now?
The core argument: Asia ex-Japan is forecast to post the fastest earnings growth among all major markets in 2026–2027.
This means → the call is not about cheapness — it is about profit momentum. Capital follows earnings.
Two engines behind it: expanding AI-related capital expenditure + strong semiconductor supply-chain activity.
Within the region, how does the pecking order work?
Taiwan ranks first — its global leadership in chip manufacturing makes it the most direct AI beneficiary.
Mainland China ranks second. Standard Chartered highlights a double play: low valuations + innovation strength. In plain terms = it is both cheap and has a technology story to tell.
India ranks third, on a different thesis entirely: domestic-demand-driven growth, largely separate from the AI/semiconductor narrative.
What does Standard Chartered's global picture look like?
Global CIO Steve Brice said the bank maintains an overweight on global equities overall, favoring the U.S. and Asia ex-Japan.
It also likes two hedging assets: emerging-market dollar bonds and gold.
This reflects a barbell framework — equities for growth, bonds and gold for protection. Neither hand lets go.
What assumptions are baked into this call?
The base case assumes Strait of Hormuz shipping resumes within weeks. This means → if the disruption persists, Asia's oil-import costs spike, and the entire "overweight Asia" thesis takes a hit.
Specific targets: S&P 500 at 7,950 by mid-2027; gold at $5,100 per ounce over the same period.
In plain terms = Standard Chartered is betting on "geopolitical risk stays contained, growth continues." Investors need to decide whether that premise holds.
Content is for reference only, not financial advice.