Global Capital Rebalancing Towards Asia: AI-Driven Earnings Growth as Core Logic
Standard Chartered Bank recently published its latest investment strategy, officially upgrading Asia (ex-Japan) equities to "overweight" and explicitly expressing a preference for markets in Taiwan, mainland China, and India. This adjustment is not an isolated tactical move but is based on in-depth analysis of global capital flows, industrial cycles, and the geopolitical economic landscape.
Asia (ex-Japan) Leads Global in Earnings Growth
At a briefing in Singapore on June 22, Yap Fook Hien, senior investment strategist at Standard Chartered, pointed out that the Asia (ex-Japan) market is expected to achieve the strongest earnings growth among major markets in 2026 and 2027. The core support for this judgment comes from two forces: the sustained expansion of artificial intelligence (AI) capital expenditure, and the technological advantages and capacity expansion of chip manufacturers in the region.
Unlike previous earnings recoveries driven by cyclical factors, this round of growth has structural characteristics. Global tech giants' investments in AI infrastructure are transmitting from the US to the Asian supply chain, particularly affecting companies in Taiwan and South Korea that are deeply involved in wafer foundry, advanced packaging, and HBM (High Bandwidth Memory) manufacturing. Standard Chartered especially emphasizes Taiwan's global leadership in semiconductor manufacturing, making it one of the most direct beneficiaries of AI dividends.
Mainland China: Low Valuation Coupled with Innovation Potential
Regarding the mainland China market, Standard Chartered believes that current valuations are in a historically low range, while innovation capabilities are accumulating. Although economic growth faces structural challenges, the profitability and global competitiveness of some technology and manufacturing leading companies have significantly improved. In areas such as AI application layers, the new energy industrial chain, and advanced manufacturing, Chinese companies are gradually gaining pricing power. This combination of "low valuation + innovation premium" provides long-term capital with a margin of safety and room for growth.
Notably, Standard Chartered does not simply view the Chinese market as a "value trap" but emphasizes its endogenous innovation momentum. This contrasts with the past model driven by consumption and real estate growth, reflecting a shift in foreign institutions' investment narrative regarding China.
India: Resilience of a Domestic Demand-Driven Economy
Standard Chartered lists India as the third preferred market in the region, valuing its highly domestic demand-driven growth characteristics. Against the backdrop of global trade frictions and supply chain restructuring, India has attracted substantial foreign direct investment due to its large demographic dividend, digital infrastructure development, and policy reforms. Consumption upgrades, fintech, and manufacturing localization are forming new earnings growth points, with relatively low sensitivity to external shocks.
Global Asset Allocation: Equal Emphasis on the US and Asia, Favor Emerging Market Bonds and GoldStandard Chartered Global Chief Investment Officer Steve Brice noted that the bank maintains an "overweight" position on global equities, but its regional preference leans toward the US and Asia (ex-Japan) markets. The underlying logic of this allocation is that US tech leaders remain the primary source of AI innovation, while Asia plays the role of enhancing manufacturing and supply chain efficiency. Together, they form the most complete investment chain under the AI theme.
In addition, Standard Chartered is also tactically bullish on emerging market dollar bonds and gold. The former benefits from easing inflation and currency stability in some emerging economies, while the latter continues to gain allocation value amid geopolitical uncertainty and long-term challenges to the dollar-based credit system. The bank forecasts that the S&P 500 will reach 7,950 points by mid-2027, and gold prices will rise to $5,100 per ounce over the same period.
Easing of Strait of Hormuz Risks: Relief for Regional Economies
Standard Chartered's baseline scenario also assumes that shipping through the Strait of Hormuz will return to normal within weeks. For Asian economies heavily reliant on oil imports, if realized, this would significantly reduce energy cost pressures and further consolidate the foundation for regional profit recovery.
Conclusion
Standard Chartered's rating adjustment this time is essentially the result of a comprehensive weighting of the diffusion effects of the AI industry, regional valuation differences, and structural earnings growth. Asia (ex-Japan) is transitioning from a "global manufacturing hub" to a "global dual hub for innovation and manufacturing," and its capital appeal is entering a new phase. For global investors, differentiated management within this region—Taiwan's technological barriers, China's value reassessment, and India's domestic demand story—will become the core variables in allocation decisions over the next few years.