Investment Monthly: AI transformation broadens exposure across Asia and sectors

Key takeaways

The US government shutdown has come to an end. Historically, real GDP tends to rebound in the following months as federal spending resumes. We remain overweight on US stocks due to solid earnings momentum and the AI transformation broadening opportunities across IT, Communications, Utilities, Financials and Industrials. However, uncertainty over Fed policy, job creation and the build-out of AI has led us to trim US exposure and diversify into Asia, gold and hedge funds, while preferring investment grade over high yield.

AI adoption and domestic consumption are twin tailwinds for Asia. In South Korea, strong memory demand, solid earnings expectations and the Corporate Value-Up programme justify our overweight stance. Japan is also upgraded to overweight, supported by a re-rating opportunity linked to the new Prime Minister’s agenda, governance reforms and record-high share buybacks. These upgrades complement our preference for mainland China, Singapore and Hong Kong, as well as Asian investment grade credit, reflecting the positive momentum in the region.

While the UK Budget has eased near-term fiscal concerns by increasing headroom to GBP22bn, economic momentum remains fragile, reinforcing market expectations of policy easing around year-end while we lean towards February 2026. The high level of net government debt and the reversal of quantitative easing policies mean that gilt yields trade with a risk premium. We prefer GBP investment grade credit and remain neutral on UK stocks as re-rating catalysts are lacking.

https://www.hsbc.com.my/wealth/insights/asset-class-views/investment-monthly/ai-transformation-broadens-exposure-across-asia-and-sectors/

content_tpl

Top Brokers

georgemiller

Publish Date: Fri, 28 Nov 2025, 12:01 PM

georgemiller

Key takeaways

Discussion

Featured

Top Brokers

georgemiller

Publish Date: Fri, 28 Nov 2025, 12:01 PM

georgemiller

Key takeaways

Discussion

Featured

Trending Articles