FTSE Russell’s latest APAC Financial Markets Spotlight report reveals that Singapore led equity gains in the Asia-Pacific (APAC) region over the past three months, with a notable 15.6% increase. This surge was primarily driven by the financial sector, which saw a 25.9% rise due to strong growth in banks’ non-interest income, particularly in wealth management.
The report, covering the period from May to July 2026, highlights Singapore’s attractive dividend yield of 4.4%, compared to the APAC average of 2.0%. This, coupled with the country’s defensive characteristics and relatively low volatility, attracted investors during a time of heightened equity volatility.
Concerns over rising artificial intelligence capital expenditure and Korea’s crowded tech positioning contributed to this volatility.
Korean equities experienced a sharp correction in July, falling 16.7% after a 77% year-to-date rally. This sell-off was attributed to crowded positioning and daily rebalancing of single-stock leveraged exchange-traded funds, rather than a decline in the tech sector’s fundamentals. Despite this, Korea’s valuation remains low compared to its historical levels, supported by upward revisions in tech and telecom earnings forecasts.
China’s market saw a 7.7% rebound in July, driven by financials and consumer discretionary sectors. State-backed exchange-traded fund buying and advancements in artificial intelligence models by firms like Alibaba and Xiaomi supported this growth.
The report also notes divergent central bank policies across the region, with countries like Australia, the Philippines, and Korea raising rates to combat inflation, whilst others like China and India maintained steady rates to support growth.
In conclusion, Singapore’s strong performance in the financial sector has positioned it as a leader in APAC equity gains, whilst varying central bank strategies reflect the region’s diverse economic conditions.
