Goldman Sachs Bullish on Select Asian Markets Amid Tech Recovery

Goldman Sachs' Executive Director Sunil Koul is overweight on China A-share markets, Japan, Korea, India, and Indonesia, driven by a tech cycle recovery and AI theme. The bank's bullish stance on select Asian markets could influence global investment strategies and shape market trends.

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Goldman Sachs Bullish on Select Asian Markets Amid Tech Recovery

Goldman Sachs Bullish on Select Asian Markets Amid Tech Recovery

Goldman Sachs' Executive Director Sunil Koul has expressed optimism about several Asian markets, citing a "barbell approach" that balances tactical value plays with longer-term structural bets. Koul is overweight on China A-share markets, Japan, Korea, India, and Indonesia, driven by a tech cycle recovery and the AI theme.

Why this matters: This bullish stance on select Asian markets could have a ripple effect on global investment strategies, influencing the flow of capital and shaping market trends. As major investment banks like Goldman Sachs turn more positive on Asian equities, it may signal a shift in investor sentiment, with potential implications for regional economic growth and stability.

Despite concerns over China's property crisis, deflationary risks, and tepid consumer demand, foreign selling has subsided. Investment banks including Goldman Sachs, UBS, and BNP have turned more positive on Chinese stocks. However, investors should exercise caution when chasing the rally, as technical indicators suggest the market is in overbought territory.

While Koul is bullish on Japan, Korea, and Indonesia, he remains optimistic about India despite recent foreign institutional investor (FII) selling. In contrast, China has seen steady inflows. Koul's strategy centers around a "tech cycle recovery and AI theme," implying he expects technology-related stocks to drive growth in these markets.

In related news, Hong Kong's Exchange Fund posted a return of HK$54.3 billion (US$7 billion) in the first quarter of 2024, boosted by rising overseas stock markets. The fund's strong performance aligns with the growing bullish sentiment among major investment banks towards Asian equities.

As investors navigate the complex landscape of Asian markets, Goldman Sachs' overweight stance on key countries, driven by the tech recovery and AI theme, provides a compelling perspective. While opportunities abound, a measured approach that balances tactical plays with long-term structural bets may prove prudent in light of market volatility and regional economic challenges.

Key Takeaways

  • Goldman Sachs' Executive Director Sunil Koul is optimistic about Asian markets, citing a "barbell approach".
  • Koul is overweight on China A-share, Japan, Korea, India, and Indonesia, driven by tech cycle recovery and AI theme.
  • Investment banks, including Goldman Sachs, UBS, and BNP, have turned more positive on Chinese stocks.
  • Koul's strategy centers around tech cycle recovery and AI theme, expecting tech-related stocks to drive growth.
  • Hong Kong's Exchange Fund posted a return of HK$54.3 billion in Q1 2024, boosted by rising overseas stock markets.