Goldman Sachs Asian Equity Perspectives: Stay the Course
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Goldman Sachs advises investors to maintain their Asian equity allocations and stay the course despite prevailing market uncertainties. The firm reiterates an overweight rating on Asian ex-Japan stocks, citing attractive valuations, solid earnings growth, and a potentially stabilizing global interest rate environment. The MSCI Asia ex-Japan index is currently trading at a 12-month forward price-to-earnings ratio of 12.5 times, representing a meaningful discount to the historical average of 15.0 times. Fundamentally, regional corporate earnings are projected to expand by approximately 10% in 2026, providing robust fundamental support for equity markets. Goldman Sachs specifically highlights North Asia and HALO or energy security themes as preferred areas of focus. The firm also remains selective regarding artificial intelligence exposure across the region. Although commodity price volatility poses a primary macroeconomic risk, its broader impact on the overall Asian equity market is deemed manageable. China and India stand out as key focus markets, supported by policy stimulus and ongoing structural reforms, respectively. Additionally, the technology and consumer sectors continue to act as the principal growth engines. Goldman Sachs recently revised its 2026 regional earnings growth forecast upward to 60%, while also raising the 12-month MXAP target to 990. The report notes that intra-regional capital flows remain healthy, and foreign investors have already significantly de-risked their positions. Consequently, the current valuation and macroeconomic backdrop supports a constructive investment stance.
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