Goldman Says North Asia Outperforms as South Asia Drops 25% on Energy and AI Divide
Updated
Updated · CNBC · May 20
Goldman Says North Asia Outperforms as South Asia Drops 25% on Energy and AI Divide
1 articles · Updated · CNBC · May 20
North Asian equities are beating southern peers because stronger fiscal buffers and better insulation from oil and gas shocks let them absorb higher energy costs, Goldman Sachs strategist Tim Moe said.
AI exposure is amplifying that gap: tech stocks make up about 80% of Taiwan's index, 60% of South Korea's and 30% of Japan's, while South Korea has risen more than 80% year to date.
China is also splitting internally, with A-shares up 10% year to date and set to outperform H-shares on policy support and improving factory-price trends — PPI turned positive for two straight months, last at 2.8%.
Moe said H-shares are lagging because they are heavier in internet application names rather than upstream AI hardware, while Japan is benefiting from political stability, earnings growth and AI robotics.
Goldman still warned of a possible summer correction as the energy supply shock hits more fully, even after last week's Xi-Trump meeting left U.S.-China tensions no worse.
As North Asia's AI boom soars, is a looming energy crisis the 'rude awakening' that will ground its high-flying markets?
With North Asia leading on AI, what hidden opportunities are investors missing in the overlooked and undervalued markets of South Asia?