Goldman Sachs on North versus South Asian stocks
An employee smiles while looking at his mobile phone in front of a digital billboard displaying the Korean Composite Stock Price Index (KOSPI) at the Korea Exchange (KRX) on April 21, 2026 in Seoul, South Korea.
Chris Jung | Nurfoto | Getty Images
North Asian markets are outperforming markets in the continent’s south thanks to tighter insulation against energy shocks, stronger financial capability and artificial intelligence developments, according to a senior strategist at Goldman Sachs.
Compared to South Asia, which “has much less buffer and does not have the ability to financially offset the passage of higher energy prices into the economy,” North Asian markets have “larger buffer stocks” and can afford to pay a higher price for oil and gas, said Tim Moe, regional equity strategist for Asia Pacific and co-head of macro research in Asia. Goldman Sachs Research.
Moe noted that some North Asian markets have seen “tremendous performance” compared to South Asia, according to a transcript of Goldman Sachs’ “Exchanges” podcast seen by CNBC.
Meanwhile, “[Markets in] In Indonesia and South Asia, there is no technology and the energy gap has decreased by 25 percent,” Moe said.
Moe noted that investors are focusing on artificial intelligence developments in the north of Asia, especially in Taiwan, South Korea and Japan, where technology-focused stocks make up about 80%, 60% and 30% of their indices. He added that the best-performing markets are South Korea and Taiwan, with South Korea up more than 80% year-to-date.
South Korea’s Kospi index.
However, Moe warned that Korean semiconductor stocks are as follows: Samsung Electronics And SK Hynix It’s trading at about five to six times this year’s earnings and about four times next year’s earnings. “This indirectly suggests that the market doesn’t really believe that profitability can continue for very long,” he said.
Moe was also optimistic about the Japanese market, citing the country’s measure of political stability, “reasonable” earnings growth and artificial intelligence robots following the election of Prime Minister Sanae Takaichi.
chinese performance
Moe sees China’s A shares, which are traded in yuan in mainland China and are up 10% year to date, as outperforming H shares, which are mainland shares traded in Hong Kong. He said he sees “very clear policy support” for the structural strategic development of China’s stock market.
“This is really a reflection of China coming out of three years of deflation as measured by PPI. Moe added that the producer price index has been positive for two consecutive months, with the latest reading being 2.8%, which is above consensus.
China’s H-shares are not doing well due to weak earnings from heavyweight stocks. “H-shares are more dominated by the internet application space [is on] “It’s the softer end of the AI business spectrum,” Moe said. “And that’s something that’s waning, in part, because the interest is shifting more towards the top trim,” he added.
Asked about his conclusions about the meeting between Chinese President Xi Jinping and US President Donald Trump last week, Moe said “no harm was done.”
“Despite concerns about geopolitics, global tensions and friction between the US and China, I think a calm in the relationship is appreciated and desired by both sides,” he added.
Moe also warned there could be a “rude awakening” when the energy supply shock “really” hits.
“I think we could be preparing for some type of correction in the summer. So that’s definitely something we’re watching carefully,” Moe said.
