Goldman Raises Asia Pacific Ex-Japan Index Target to 1,120

Goldman raised its forecast for the MSCI AC Asia Pacific ex-Japan Index to 1,120 from 1,080, projecting a 26 per cent upside driven by higher earnings expectations in Korea and Taiwan.

Second-quarter earnings across the benchmark grew 102 per cent, with 44 per cent of companies beating forecasts compared with 27 per cent that missed.

Earnings growth was led by Singapore, Taiwan and Indonesia, while Australia, Malaysia and India lagged, with Singapore and Taiwan recording the highest number of firms exceeding expectations.

North Asian Tech Dominates the Rally

The bank assigned an overweight rating to Japan, South Korea, Taiwan and mainland China A-share equities. South Korea’s benchmark Kospi received a revised 12-month target of 12,000, representing a 79 per cent upside from current trading levels, underpinned by heavyweight chipmakers Samsung Electronics and SK Hynix.

By contrast, Hong Kong, Singapore, Malaysia, India and offshore Chinese equities remain rated at market weight. Southeast Asian markets face a split outlook, with Thailand, Indonesia and the Philippines assigned underweight ratings alongside Australia.

Consumer Retail and Hardware Divergence

Sector allocations show a sharp divide between capital-intensive tech manufacturing and consumer-facing retail. Goldman designated tech hardware, semiconductors, capital goods, healthcare and non-Australian, non-Chinese lenders as its most favored sectors.

Consumer retail, media and property remain ranked at market weight across the region, reflecting steady but unspectacular domestic consumer demand. Transportation, utilities and automotive manufacturers received underweight ratings.

Earlier Forecast Trajectory

The revised projections build on earlier upgrades from May, when Goldman set an initial 12-month Kospi target of 9,000 before tech earnings accelerated. The broader index target of 1,120 reflects cleaner investor positioning following recent portfolio unwinds across regional exchanges.

Investors now track third-quarter tech hardware order books and upcoming United States midterm election policy rhetoric, which remain key external risks alongside elevated bond yields and Middle East tensions.