Goldman Sachs raises profit forecasts and index targets for Asian stock markets, urging to increase holdings in markets such as Japan, South Korea, and China

Goldman Sachs holds a positive outlook on Asian stock markets and expects further increases; it has raised its 2026 earnings growth forecast for the MSCI Asia (excluding Japan) Index (MXAPJ) from 24% to 31%, mainly due to favorable trends in the semiconductor industry, and anticipates a 120% earnings growth for the Korean market (up from the original forecast of 75%) and a 32% earnings growth for the Taiwanese market (up from the original forecast of 30%).

At the same time, the bank has raised its MXAPJ index target from 855 points to 890 points, reflecting a potential return in USD terms and total return potential increases of 13% and 15%; it expects this year's returns to be more concentrated in the first half, raising the 3-month and 6-month index targets to 830 points and 860 points, respectively.

In terms of regional allocation, the bank maintains an "overweight" rating on Korea, China (including offshore and A-shares), and India, and has upgraded Japan to "overweight." These markets, along with Taiwan and Malaysia, which are rated "in line with the market," have the potential to achieve mid-teens or higher returns.

However, the bank is less optimistic about the return prospects for most of the ASEAN region and Australia, indicating that active investors have potential opportunities to achieve excess returns at both the market and sector levels