Asia Pacific Weekly Kickstart MXAPJ closed flat for a second straight week amid higher bond yields, and rising oil prices

Portfolio Strategy Research 5 September 2026 | 1:09AM SGT

MXAPJ closed flat for a second straight week amid higher bond yields, and rising oil prices; we raise MXAPJ target to 1,120 on stronger earnings, while near-term volatility may persist

MXAPJ -0.0%, with Philippines (+4%), Singapore, and forecasts, led by Korea and Taiwan. While near-term Timothy Moe, CFA | Thailand (each +1%) outperforming China A, Korea, and volatility may persist amid higher bond yields, Middle East Goldman Sachs (Singapore) Pte

India (each -1%). Banks, Energy, and Telecom. Sev. led, while tensions, and the upcoming US midterm elections, we see a Alvin So, CFA | Materials, Internet/Media, and Consumer Retails lagged. EM more supportive backdrop thereafter and highlight Goldman Sachs (Asia) L.L.C.

Asia ex-China saw outflows this week (-US$4.7bn), driven by derivative strategies for both downside protection and John Kwon | Taiwan (-US$2.4bn) and Korea (-US$1.8bn). Bonds and upside participation. Goldman Sachs (Singapore) Pte equities sold off on inflation concerns amid escalating FTSE China and Taiwan Index Reviews: FTSE China Terry Chan Middle East tensions, with Brent crude rising to US$97/bbl, | Goldman Sachs (Asia) L.L.C. 50/A50 and Taiwan 50 will see 2/2 and 1 constituent while dovish comments from Governor Waller later eased changes, respectively, effective after 18 September. Kinger Lau, CFA rate hike fears. US ISM manufacturing disappointed but | Goldman Sachs (Asia) L.L.C. Together with the FTSE Global Equity Index Series (GEIS) services beat expectations. In Asia, China’s PMI rose as Sunil Koul review, we estimate the rebalancing could generate over expected, Korea’s exports rebounded on tech demand. The | Goldman Sachs International US$5.5bn and US$2.2bn of gross two-way passive flows, 2027 budget outlined a significant reduction in deficit and a Bruce Kirk, CFA and US$1.5bn and US$1.2bn of net inflows, across the | reduction in bond issuance. India’s GDP exceeded Goldman Sachs Japan Co., Ltd. China/Hong Kong and Taiwan markets, respectively. expectations despite weaker manufacturing PMI. Key Amorita Goel, CFA | upcoming data/events are summarized within. Q2 Earnings Review: MXAPJ CY2Q/1H26 earnings grew Goldman Sachs (Singapore) Pte

+102%/+71%, with 44% beats vs. 27% misses. Singapore, Charts of the Week Taiwan, and Indonesia led, while Australia, Malaysia, and Into the home stretch: Following the 3QTD correction, we India lagged. remain constructive on Asian equities, supported by strong Earnings Revision Leading Indicator (ERLI) signals tech-driven earnings growth, attractive valuations in sustained earnings upgrades at a slower pace; Regional selected markets, and cleaner positioning after recent Asia Drawdown Risk (RADaR) model suggests materially unwinds. We raise our MXAPJ target from 1,080 to 1,120, lower downside risk following the recent correction. implying 26% price upside, driven by higher earnings

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Goldman Sachs Asia-Pacific Weekly Kickstart

Charts of the Week: Into the home stretch

Exhibit 1: We favor North Asia and AI-related tech hardware exposure; key themes include HALO, energy security, defense, and shareholder returns

Summary Views Returns & 12m index target: 1120, implying 26%/29% USD price/total return; Growth (MXAPJ) GSe path (3/6/12m): 960/1040/1120; 72%/23% EPSg in 2026/27 OW Japan, Korea, China A, Taiwan Markets MW Singapore, Hong Kong, Malaysia, India, China Offshore UW Australia, Thailand, Indonesia, Philippines OW Tech H/W & Semis, Capital Goods, Health Care, Ex-AU/CN Banks Internet/Media/Entertainment, Insurance & Other Fins, Property, Chemicals, Sectors MW Metals & Mining, Telecom Services, Consumer Retail & Durables, AU/CN Banks, Energy UW Transportation, Software & Services, Utilities, Autos, Cons Staples AI Beneficiaries: Infrastructure (Servers, Hardware, Semis) HALO (Heavy Assets, Low Obsolescence): Capital Intensive vs. Light Power Demand: Nuclear Power, Renewables, Power & Electricity Themes & Geopolitics: U.S.…