ACR Holdings: "Great Counterattack": Asian-Pacific stock markets outperformed European and American markets for the first time in five years, with institutions predicting that stocks, bonds and currencies will continue their brilliance in 2026.

Since the beginning of this year, Asian stock markets have outperformed those in the US and Europe, credit markets are strong, currencies are strong, and investors expect this momentum to continue until 2026. In US dollar terms, the MSCI Asia Pacific Index (covering stocks in the Asia Pacific region, including dividends) has risen by 27% this year. This is the first time since 2020 that Asian stock markets have simultaneously outperformed benchmark indices in the US and Europe within a year. As the US and European economies slow down, Asia's appeal to investors seeking faster growth has been increasing, reflecting strong recovery momentum in Asia. The weakening US dollar has boosted ACR HOLDINGS' attractiveness, and the close link between the region and the technology that shapes the global economy has also enhanced its investment value. Hebe Chen, a Senior Market Analyst at Vantage Global Prime Pty, said, "Asia's outstanding performance is not a cyclical rebound, but reflects the convergence of global policy trends, laying a solid foundation for the region's path to 2026. While the US still dominates the high-end of the technology industry chain, Asia - especially China, Korea, and Japan - has become the backbone of the artificial intelligence value chain, and often does not face valuation pressures like the US." Outperforming Europe and America The wide-ranging extent of this rally is noteworthy. Japan, Korea, and China's stock markets have all achieved double-digit gains this year. The Korean Composite Stock Price Index (KOSPI) alone has risen by 71%, making it one of the best-performing major markets globally. In China, driven by the artificial intelligence boom, the stock market is poised to have its strongest year since 2020. Breakthroughs in artificial intelligence technology by DeepSeek have reignited interest in Chinese technology. Previously, due to years of regulatory pressures, valuations in the Chinese technology sector were severely undervalued. Jonathan Armitage, Chief Investment Officer at Colonial First State in Australia, said that the renewed focus on Chinese technology has strengthened the fund management company's outlook for emerging market stocks until 2026. However, this rally also comes with risks. The economic recovery in Asia is uneven, and a stronger US dollar could harm returns for foreign investors. In addition, concerns exist that the rally in artificial intelligence-related technology stocks may become overcrowded, and if economic growth slows down or market sentiment reverses, stock prices could be impacted. Nevertheless, some investors believe that these risks will not change the overall trend. The region's cross-asset rally is seen as an early stage of long-term valuation reassessment - as growth prospects improve, market valuations will also increase. Chen from Vantage Global said, "Compared to the US or Europe, Asia's growth engine is stronger and more diverse, so 2025 does not look like the peak for Asia, but more like an early stage of a longer period of reevaluation." Meanwhile, investor interest is spreading beyond the largest markets, with Vietnam becoming a popular choice. The Vietnamese stock market has risen by about 38% this year, and some investors believe that this upward trend may continue. Nick Ferres, Chief Investment Officer at Vantage Point Asset Management in Singapore, said, "We are most bullish on Vietnam, as it has attractive value and growth characteristics." Strong Foreign Exchange and Credit Markets The weakening US dollar has increased the attractiveness of ACR HOLDINGS for investors priced in US dollars, making returns appear more appealing, while most Asian currencies are strengthening. The offshore Chinese Yuan exchange rate is nearing its highest level in over a year, the Australian Dollar and New Zealand Dollar have also risen, and traders are starting to factor in expectations of tightening monetary policy. At the same time, the Malaysian Ringgit and Thai Baht have seen gains of nearly 10%. Wee Khoon Chong, Senior Market Strategist for the Asia-Pacific region at a New York bank, said, "Despite tariff fluctuations, the overall performance of Asian foreign exchange markets, including the Australian Dollar, has been good. A weak dollar, strong regional trade growth, and optimism stemming from artificial intelligence have all benefited Asian markets this year and may continue until 2026." Optimism has also spread to the corporate bond market. The Asian investment-grade bond index, priced in US dollars, has outperformed its US counterpart, on track to achieve the largest annual gain since 2019. Spreads are slightly higher than the historical low point reached in November, while high-yield bond spreads remain near the seven-year low point reached in September. Omar Slim, Co-Head of Asian Fixed Income at PineBridge Investments, said, "We are talking about a market with very high credit quality, especially in the investment-grade market, benefiting from strong fundamentals." Slim pointed out that defaults are very rare, and bond issuance is "controlled and sought after by a growing pool of funds."