# East Asia vs Southeast Asia Divide Since 2022, Asian markets split. AI-linked East Asia boomed. Southeast Asia went nowhere.^[From [[Key Themes in Asia - Fritzell Oct 2026]], slides 6-13] ## Index returns, 2022 to Oct 2026 | Market | Index | Return | |---|---|---| | Taiwan | TAIEX | +197% | | Japan | TOPIX | +108% | | South Korea | KOSPI | +104% | | Thailand | SET | -4% | | Indonesia | IDX | -9% | | Philippines | PSEi | -21% | ## Why the gap matters - Valuation follows returns. CAPE, Sep 2026 (Siblis Research): - Taiwan 46.7. US 35.9. Japan 35.4. Korea 31.8. - China 17.1. Thailand 16.7. Malaysia 16. Indonesia 15. - Philippines 10.5. Hong Kong 10.2. - See [[Shiller Price to Earnings Ratio]]. - Insiders buy where prices are low. Sell/buy ratio, Sep 2026 (Smart Insider): - Korea 0.3x. Thailand 0.4x. Hong Kong 0.6x. - China 1.7x. Insiders there sell more than they buy. - Fund managers crowd one trade. "Long global semiconductors" is the top crowded trade at 53% (BofA FMS, Sep 2026). - The US dollar is expensive. The real broad dollar index sits near its 2025 peak. Foreign capital inflows hold it up. US net international investment position is about -US$24tn, near -70% of GDP. - East Asian currencies (CNY, TWD, KRW, JPY) look cheapest against it. - See [[Dollar Milkshake Theory]] for the opposite case. ```mermaid flowchart TB subgraph EA["East Asia: AI capex trade"] TW["Taiwan CAPE 46.7"] JP["Japan CAPE 35.4"] KR["Korea CAPE 31.8"] end subgraph SEA["Southeast Asia + HK: value trade"] TH["Thailand 16.7"] ID["Indonesia 15"] PH["Philippines 10.5"] HK["Hong Kong 10.2"] end FLOW["Global funds<br/>53% long semis"] --> EA INS["Insider buying"] --> SEA INS --> KR ``` - Korea sits in both groups. The index is an AI trade. Most single stocks are value. See [[Korea Discount]]. - Phase view: [[Marc Faber Asian Market Cycle]]. ---- tags: #boat #investing #macro links: [[Asia Macro MOC]] [[Key Themes in Asia - Fritzell Oct 2026]] [[AI Capex Super-Cycle]] [[Geopolitical Capital Flows]]