Hedge Funds Go All‑In On Asia Equities As Gulf Credit Stays Solid

Global hedge funds have ramped up buying of Asia‑Pacific equities to record levels even as macro uncertainty lingers, underscoring a growing conviction that the region offers some of the best risk‑reward profiles in a world shaken by AI disruption and tariff realignments.

Goldman Sachs told clients that in the week to Friday 13 February, hedge funds bought a record amount of stock across developed and emerging Asian markets, according to Reuters. The surge in demand spanned multiple sectors but showed particular interest in technology, industrials and financials, areas seen as key beneficiaries of AI, electrification and regional supply‑chain shifts.

This wave of buying comes despite, or perhaps because of, volatility around the global AI trade. With US investors expressing “AI angst” over the potential disruption generative models pose to software and service businesses, Bloomberg notes that some global money managers have turned to Asia’s hardware‑heavy tech landscape as a relatively more tangible way to play the theme. Companies in South Korea, Taiwan and Japan that make chips, memory and industrial‑automation equipment are particular targets.

At the same time, fixed‑income investors see the Gulf as a pillar of stability in global credit. The Gulf Capital Market Association’s archive cites S&P Global Ratings as saying most rated GCC corporates are expected to maintain stable credit profiles in 2026, supported by strong sovereigns and diversified funding channels. The association also highlights that foreign assets of Gulf central banks grew 6.3% in 2024 to reach nearly 762 billion dollars, driven mainly by higher reserves in the UAE.

Green and Islamic finance are adding depth to regional capital markets. Qatar Stock Exchange’s first green sukuk—the 500‑million‑riyal issuance by Al Rayan Bank—illustrates how sustainable instruments are broadening the investor base and offering new ways to fund transition projects. Fitch Ratings has assigned Al Rayan Bank a long‑term issuer default rating of ‘A’ with a stable outlook and a standalone viability rating of ‘bbb‑’, reflecting solid capitalization and franchise strength.​

Together, these trends point to an evolving two‑way relationship between Asia and the Gulf in capital markets. On the equity side, Gulf sovereign funds and institutions are among the global investors taking advantage of Asia’s structural growth and AI‑driven opportunities. On the credit side, Asian insurers, asset managers and banks are allocating to stable GCC credits and green sukuk for diversification and yield.

Bloomberg’s “New Economy” newsletter underscores that trade between Asia and the Middle East is expected to grow from 905 billion dollars in 2024 to around 1.5 trillion by 2030, according to Standard Chartered economists. That deepening trade corridor naturally demands more sophisticated financial intermediation, from hedging instruments and trade finance to project bonds and equity co‑investments.

Yet risks remain. Confusion around US‑China tariffs, evolving AI‑regulation regimes, and the International Energy Agency’s forecast of slower oil‑demand growth and supply surpluses by 2026 all inject uncertainty into earnings and sovereign‑revenue trajectories. For hedge funds, this means that record buying in Asia could amplify downside if sentiment turns; for Gulf credits, stable ratings could be tested by prolonged commodity downturns or geopolitical shocks.

For now, however, the combination of hedge‑fund enthusiasm for Asia and rating‑agency confidence in the Gulf paints a picture of a global capital‑markets system where risk is being selectively embraced rather than broadly shunned. Investors appear willing to place differentiated bets on regions and sectors they believe can thrive amid AI disruption and shifting trade patterns—placing Asia and the Gulf near the center of the 2026 portfolio‑construction map.