Macquarie: ASEAN Markets Gained as Investors Rotated Out of AI Stocks

Markets in the Association of Southeast Asian Nations (ASEAN) benefited from a capital rotation in July 2026 as investors pulled back from high-momentum, AI-driven trades, according to a new analysis from Macquarie.

The investment bank noted that the performance was driven by a regional rotation rather than a clear shift between growth and value stocks, mirroring a broader selloff in Asian momentum trades before risk appetite recovered.

AI Unwind Sparks Regional Rotation

The shift in capital flows occurred as the powerful momentum behind AI-related equities began to unwind, prompting investors to reallocate funds. Within ASEAN, this trend led to varied outcomes across different sectors and countries.

According to Macquarie, consumer sectors led the region in terms of positive earnings revisions, while the energy sector lagged behind. The dynamic suggests investors are becoming more selective, focusing on specific fundamental stories within the region rather than broad market trends.

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Country-Level Performance Varies

Macquarie's analysis highlighted distinct drivers of performance across individual ASEAN markets, indicating that investors are not treating the region as a monolithic block.

• Thailand: Maintained the strongest market position, with performance driven by fundamental factors and the most robust earnings revision momentum in ASEAN. Positive returns from earnings upgrades offset mild multiple compression.
• Singapore: Returns were driven by multiple expansion. Low-risk stocks outperformed as investors showed caution during the global momentum unwind.
• Indonesia: A return of risk appetite drove multiple expansion through technical positioning, despite underlying earnings revisions remaining weak.
• Malaysia: Saw returns supported by a rotation into the region's defensive laggards, although factor leadership was unclear and earnings revisions softened.
• Philippines: Investors favored liquid companies with stable, visible earnings. The market saw a broader recovery in earnings revisions, though analyst-driven top picks lagged.