Global capital is coming back to Southeast Asia¡¯s stock markets this month, positioning the cohort as one of the must-watch pockets of global finance for 2026.
Drawn by cheap valuations and the need to diversify portfolios, foreign funds have poured $337 million into Southeast Asia¡¯s emerging markets in December ¡ª poised to be the most since September 2024. Markets in Indonesia and Thailand have led the way in luring investors back after they sold regional equities in 10 of the previous 11 months. Overall, outflows for 2025 still stand at about $15 billion.
A dearth of stocks linked to the booming artificial intelligence sector has been one key reason for the MSCI ASEAN Index to trail a broader Asia Pacific gauge by about 13 percentage points in 2025, the most in five years. Besides affordable valuation, the bloc is attracting money managers keen to find alternatives to their high exposure to tech stocks given the worries around an AI bubble.
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