Asia Pacific Weekly Kickstart MXAPJ rose another 1 as HK China Offshore rebounded and Asian FX strengthened despite resumed...

Portfolio Strategy Research 22 August 2026 | 12:39AM SGT

MXAPJ rose another 1% as HK/China Offshore rebounded and Asian FX strengthened despite resumed foreign selling; tech exports remained resilient amid higher oil prices

MXAPJ rose +1.0%, with Hong Kong (+4%), China offshore Mutual Fund Positioning: Both EM and Asia funds added Timothy Moe, CFA | (+3%), and Indonesia (+2%) outperforming Taiwan (-2%), exposure to Korea in July, while trimming exposure in Goldman Sachs (Singapore) Pte

Philippines, and Singapore (each -1%). Health care, Taiwan and China. Sector-wise, Korea Tech saw the largest Alvin So, CFA | Materials, and Energy led, while Capital Goods, Autos, increases, while Taiwan Tech, Korea Industrials, and China Goldman Sachs (Asia) L.L.C.

Software, and Staples lagged. EM Asia ex-China saw foreign Banks saw the largest reductions. John Kwon | outflows (-US$1.5bn), driven by Korea (-US$1.6bn). Goldman Sachs (Singapore) Pte MSCI Index Review: We expect the non-core index Globally, long-dated bonds sold off on fiscal, inflation, rebalancing (covering factor, ESG, and custom indices) to Terry Chan geopolitical, and AI financing crowd-out concerns. US 30Y | Goldman Sachs (Asia) L.L.C. add ~US$8bn in gross two-way passive flows across APAC, yields reached their highest since 2007, with Treasury on top of the US$34bn associated with the core index, Kinger Lau, CFA buybacks doing little to stem the sell-off. US manufacturing | Goldman Sachs (Asia) L.L.C. effective after the close on August 31. Japan, India, and data beat expectations, while housing starts and IP Sunil Koul Taiwan should see the largest inflows, while Korea, disappointed. China’s July activity data broadly missed, while | Goldman Sachs International Australia, and ASEAN should see the largest outflows. Japan’s 2Q GDP disappointed on weaker consumption and Bruce Kirk, CFA | capex. Korea’s early-August exports rebounded on stronger Leveraged ETFs: Korea LETF AUM has rebounded from a Goldman Sachs Japan Co., Ltd. chip demand. Bank Indonesia held rates and extended FX US$16bn trough to US$25bn, lifting leveraged exposure to Amorita Goel, CFA | hedging discounts, while RBI minutes signaled a hawkish 1.9% of market free float; Taiwan leveraged ETF AUM Goldman Sachs (Singapore) Pte shift. Key upcoming data are summarized within. remains near a record high of US$13bn (0.7%), with both seeing profit-taking outflows since August. Charts of the Week Earnings Review: MXAPJ CY2Q26 earnings (84% reported) Hedge Fund Flows: GS Prime Services data show marginal +135%/+52% yoy/qoq, with 46% beats vs. 26% misses and net selling in the global Prime book MTD. Following record a median surprise of +4.3%. net selling in July, Asia continues to drive the selling, albeit at a slower pace. Japan, Korea, and Taiwan are the most net-sold markets, while China has been net bought.

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Goldman Sachs Asia-Pacific Weekly Kickstart

Charts of the Week: Hedge Fund Positioning (Mid-August)

Exhibit 1: GS Prime Services data show that gross leverage among Asia Exhibit 2: ...while net leverage remained range-bound at 59.3% (59th percentile Fundamental L/S managers declined sharply by 14.5 pts MTD to 181.0%, its over one year; 82nd percentile over five years) lowest level in more than a year (43rd percentile over five years)...

Gross Leverage: Asia Fundamental L/S Net Leverage: Asia Fundamental L/S

Source: Goldman Sachs FICC and Equities Source: Goldman Sachs FICC and Equities

Exhibit 3: Net selling was led by Korea and Japan, followed by Taiwan, and Exhibit 4: Following sharp declines in July, allocations to the region were partially offset by buying in China; Japan remains the only net-bought market broadly flat MTD; net allocation to Asia ended at 28.5%, representing an 11.7% YTD, while Korea is the most net-sold market in the region overweight relative to the MSCI World benchmark

Net Trading Flows: Asia Markets Net Regional Allocation | O/U Weights vs MSCI AC World

% of Regional Gross MV at start of Period 16% 25%

%…