[ANZ Report] Asian Equities: No Repeat of 2022's Nightmare: Three Strong Fundamentals Defending Against Oil Shocks

[ANZ Report] Asian Equities: No Repeat of 2022's Nightmare: Three Strong Fundamentals Defending Against Oil Shocks

Subtitle: Lower Baseline Inflation, the Semiconductor Supercycle Shield, and the 'Renminbi Anchor' Effect

Original Report Date: March 6, 2026

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3-Line Summary

• Inflation Defense: Unlike 2022, Consumer Price Index (CPI) growth across major Asian economies is currently controlled within central bank target ranges, significantly reducing the risk of an oil shock spiraling into aggressive rate hikes or uncontrollable inflation.

• Export Boom Led by Semiconductors: Driven by the AI-fueled 'semiconductor supercycle,' Asian exports are recording double-digit growth, creating a massive current account surplus (a shield) that more than offsets the increased cost of energy imports.

• FX Defense and China's Role: Alongside the active currency defense mechanisms of Asian countries, the People's Bank of China (PBOC)'s commitment to a stable Yuan (CNY) is acting as a powerful 'anchor,' preventing a chain reaction of currency depreciation across the region.

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In-Depth Report Analysis

Following Goldman Sachs, the Australia and New Zealand Banking Group (ANZ) also cautioned against the market's excessive fear regarding Asian equities in its recent Asia Macro Weekly Report. ANZ diagnosed that the current market sell-off stems from simple geopolitical uncertainty rather than any damage to the fundamental strength of Asian economies, asserting, "Asian economies are far better equipped to withstand a temporary oil shock now than they were during the Russia-Ukraine war in 2022." Let's examine the three core defense mechanisms the Asian market possesses today compared to 2022.

1. A Different 'Starting Point' for Inflation: Ample Buffer Capacity

Rising energy prices due to conflicts in the Middle East—especially the heightened risks in the Strait of Hormuz, where about 20% of global oil and gas volume passes—are undeniably a negative supply shock. However, ANZ draws a firm line, stating that the macroeconomic environment in 2022 and today are fundamentally different.

In 2022, the oil shock compounded an already-peaking inflation crisis driven by explosive post-COVID global demand, making the impact devastating. In contrast, current CPI growth across Asia remains at stable levels, either within or below the target ranges of respective central banks. Because the baseline for inflation is low, there is little concern that moderately rising energy costs will cause public 'inflation expectations' to unmoor. In short, Asian central banks have the 'buffer capacity' to absorb upward price pressures, eliminating the need for draconian interest rate hikes that crush the economy.

2. Solid Growth Momentum Forged by the Semiconductor Supercycle

The second rationale presented by ANZ is the overwhelming strength of Asia's core economic drivers: 'exports and growth momentum.' The year 2022 was a harsh winter when the global semiconductor cycle was entering a downcycle. Conversely, this year, Asia is right in the middle of a 'semiconductor and technology supercycle' ushered in by Artificial Intelligence (AI). This tech boom is completely decoupled from geopolitical conflicts in the Middle East and is enjoying its own independent rally.

Currently, exports in the Asian region are showing double-digit growth rates, and the ASEAN manufacturing Purchasing Managers' Index (PMI) is on an upward trajectory, indicating brisk factory activity. Of course, most Asian countries—such as South Korea (energy exposure at 4.6% of GDP) and Thailand (5.6%)—rely heavily on fossil fuel imports and could see their current accounts hit by rising oil prices. However, thanks to the stellar export boom in semiconductors and other goods, most Asian countries have amassed ample 'current account surpluses' this year, serving as a sufficient cushion against rising energy import bills. (With the exceptions of Indonesia and the Philippines).

3. Asian Currency Defense Lines and the 'Renminbi Anchor'

Typically, a combination of rising oil prices and a strong US dollar leads to the depreciation of Asian currencies, which in turn raises the local cost of crude oil imports, triggering a vicious cycle of 'imported inflation.' However, ANZ forecasts that policymakers across Asia will actively deploy all available tools—including verbal intervention, liquidity management, and direct foreign exchange market intervention—to prevent disorderly currency plunges.

The most intriguing variable ANZ highlights here is the role of the People's Bank of China (PBOC). China currently maintains a strong stance in supporting the strength and stability of the Yuan (CNY). By having the currency of the region's largest economy act as a steadfast 'anchor,' the risk of 'competitive devaluation'—where other Asian nations artificially weaken their currencies to gain export competitiveness—is largely blocked. This plays a critical role in reducing FX volatility and defending price stability across Asia.

However, ANZ noted a caveat within the region: Indonesia (IDR) could be somewhat vulnerable to depreciation pressures due to a combination of relatively lower foreign exchange reserves, a deteriorating current account, and recent negative outlook downgrades by sovereign credit rating agencies.

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StockHub Insight & Comments

While the broader market engages in panic selling entirely consumed by the geopolitical crisis in the Middle East, the ANZ report calmly highlights Asia's fundamental strength, which has completely transformed since 2022. An oil shock encountered when inflation is already subdued is entirely manageable. Above all, the unprecedented 'semiconductor export boom' led by AI acts as a formidable shield. Rather than being swept up in short-term geopolitical noise and dumping high-quality Asian assets at a discount, investors should exercise the wisdom to view this as a prime buy-the-dip opportunity for core Asian tech stocks in countries like South Korea and Taiwan, supported by robust current account surpluses and solid earnings momentum.