Naughty Flicks

Skip NavigationMarketsBusinessInvestingTechPolitics & PolicyVideoWatchlistInvesting ClubPROLivestreamMenuExpectations for higher earnings, led by Korea and Taiwan have prompted Goldman to raise its forecast for the MSCI AC Asia Pacific ex-Japan Index to 1,120 from 1,080, implying a 26% upside. MXAPJ second-quarter earnings grew 102%, with 44% beats compared with 27% misses, according to Goldman, with earnings growth led by Singapore, Taiwan and Indonesia, while Australia, Malaysia, and India lagged. “We favor North Asia and AI-related tech hardware exposure,” said Goldman, noting that the key theme also included energy security, defense and shareholder returns. Singapore and Taiwan had the most number of companies exceeding expectations for their second-quarter earnings, according to Goldman. Tech hardware and semiconductors, capital goods, healthcare and non-Australian or Chinese banks are the most favored sectors by Goldman. Sectors that are ranked as market weight include media, property and consumer retail, while transportation, utilities and auto sectors are deemed as underweight by the bank. Across markets, Goldman sees Japan, Korea, China “A” share markets and Taiwan as overweight, but puts Singapore, Hong Kong, Malaysia, India and China offshore market as market weight. Australia, Thailand, Indonesia and Philippines are rated underweight. Goldman puts its 12-month target for South Korea’s benchmark Kospi at 12,000, about 79% upside from current levels. Earlier this year, investment banks had raised targets for South Korea’s benchmark index Kospi, as a rally in artificial intelligence helped fuel its semiconductor giants like Samsung and SK Hynix to new heights. Goldman had assigned a 12-month Kospi target of 9,000 in May. While there are worries over tensions in the Middle East, higher bond yields, near-term volatility as well as the upcoming U.S. midterm elections, Goldman still sees a “more supportive backdrop.” “We remain constructive on Asian equities, supported by strong tech-driven earnings growth, attractive valuations in selected markets, and cleaner positioning after recent unwinds,” Goldman said.Read More