Standard Chartered Bank is overweight on Asia excluding Japan, and bullish on AI-driven markets in Taiwan and India.

Standard Chartered Bank Overweights Asia ex-Japan, Focusing on AI and Earnings Growth

Global asset managers are reassessing regional allocations. At a Singapore briefing on June 22, 2026, Standard Chartered Bank upgraded its rating on Asia ex-Japan equities to "overweight" and explicitly expressed bullish views on Taiwan, China, and India. This decision is driven by a comprehensive assessment of AI-driven investment, strong corporate earnings, and easing geopolitical risks.

Market Background

The current global macro environment presents a diverging landscape. The U.S. economy maintains resilience at high interest rates, but growth is expected to slow gradually; Europe continues to adjust under the drag of energy costs; emerging markets benefit from supply chain restructuring and a tech cycle resurgence. Standard Chartered believes that Asia ex-Japan is becoming the region with the highest earnings growth potential globally:

• Earnings growth leadership: Senior investment strategist Yap Fook Hien noted that Asia ex-Japan markets are expected to achieve the highest earnings growth among major markets in 2026-2027, driven primarily by AI-related capital expenditure and chip manufacturing demand.
• Easing energy risks: Standard Chartered's baseline scenario assumes that shipping through the Strait of Hormuz will resume within weeks, which should help alleviate price pressures on oil-import-dependent Asian regions.
• Valuation advantages: Chinese equities trade at historically low valuations while innovation capacity continues to strengthen; Taiwan, with its leadership in semiconductor manufacturing, continues to attract capital.

Current Capital Flows

Standard Chartered's asset allocation adjustment reflects institutional capital tilting toward tech-driven Asian markets:

• Regional preference: Asia ex-Japan equities upgraded from "neutral" to "overweight", with Taiwan and China as the top picks, followed by India. Taiwan benefits from the AI chip demand surge, China from low valuations and policy support, and India from domestic demand-driven growth.
• Global equities: The bank maintains an "overweight" view on global equities, but adjusts preference to two major blocks—the U.S. and Asia ex-Japan—suggesting relative attractiveness of Europe and Japan has declined.
• Bonds and alternative assets: Bullish on emerging market USD bonds, seeing them offering attractive yields; gold is included in the overweight list as a diversification tool, with a target price of $5,100/oz (by mid-2027).
• Outlook targets: Standard Chartered forecasts the S&P 500 will reach 7,950 points by mid-2027, indicating further upside from current levels.

Investment Logic Analysis

This allocation change is driven by the convergence of multiple structural factors:1. AI Investment Cycle: AI infrastructure spending is spreading from the US to Asia, with chipmakers like TSMC in Taiwan becoming direct beneficiaries. China's efforts in AI applications and semiconductor self-sufficiency also create investment opportunities. 2. Earnings Resilience: Asian corporate earnings growth is expected to be the strongest globally, differing from the traditional export-dependent cyclical pattern—domestic demand (especially in India) and technology exports (Taiwan, South Korea) jointly support it. 3. Valuation and Policy Support: Chinese stock market valuations are at historical lows, while the government continues to roll out growth-stabilizing and innovation policies; India benefits from demographic dividends and policies to attract foreign investment in manufacturing. 4. Geopolitical Risk Pricing: The anticipated resumption of shipping in the Strait of Hormuz reduces upside risks for oil prices, helping to stabilize energy costs in Asia.Standard Chartered Global Chief Investment Officer Steve Brice stated that the bank maintains an overweight position on global equities and holds a dual preference for Asia ex-Japan and the United States. Investors should focus on the synergistic effects of earnings growth and AI investment, but need to flexibly respond to geopolitical and policy fluctuations.

Conclusion: Standard Chartered's allocation adjustment reflects a consensus among global institutional investors that Asia ex-Japan has become an undeniable long-term growth engine. AI-driven earnings cycles, low valuations, and structural reforms provide multiple supports for this region, but risks also coexist. For long-term capital allocators, balancing market weights and maintaining diversification remain core principles.

*Data source: Standard Chartered Bank investment briefing dated June 22, 2026; Reuters report.*