2025’s winners and laggards: STI posts best gains in years; South Korea, Vietnam outshine regional peers

[SINGAPORE] South Korea emerged as Asia’s leading market in 2025, with Vietnam outperforming its Asean peers, despite a year marked by volatility and tariff headwinds.

Singapore also posted its strongest performance in at least four years, with the benchmark Straits Times Index (STI) posting a total return of 22.7 per cent last year. The blue-chip index ended the year at 4,646.21, about 0.2 per cent down.  

Across the rest of South-east Asia, Vietnam’s benchmark VN Index posted more than 40 per cent of total returns for the year of 2025, after ending its final trading session for the year 1 per cent higher at 1,784.49.

On the other hand, Thailand’s SET Index pulled in a poor performance after what JPMorgan analysts called a “stormy year” for Thai equities. The index’s total returns for 2025 fell 10 per cent from the year before.

Across other Asian markets, South Korea’s Kospi led the way with a total return of 75.6 per cent for 2025. The index ended its final session of the year 0.2 per cent down on Dec 30 at 4,214.17. 

Hong Kong’s Hang Seng Index, ended Dec 31 down by 0.9 per cent at 25,630.54, with total returns for 2025 at 27.8 per cent. 

Japan’s Nikkei 225 closed out 2025 around 0.4 per cent lower at 50,339.48, bringing its total returns for the year to 26.2 per cent. The exchanges of both Japan and South Korea were closed on Dec 31. 

China’s Shanghai Composite Index ended 2025 up by about 0.1 per cent at 3,968.84. Its total returns on the year were around 18.4 per cent. 

Asean outlook: Analysts overweight on Singapore, Vietnam and the Philippines

South-east Asian markets were dragged by inflation, interest rate hikes and “disappointing” domestic demand in 2025, said JPMorgan analysts in a year-end note. 

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But regional markets could see change in 2026, they noted, assigning an “overweight” rating to Singapore, Vietnam and the Philippines. 

The analysts were of the view that Singapore stocks will continue “heading to new highs” on the back of strong support by the authorities to improve liquidity in the local bourse, as well as a surge in capital inflow into the country. 

Similarly, DBS Group Research in a December note highlighted that Singapore’s equities market is showing “nascent signs of revival”, with the SGX’s total securities market turnover volume for Q3 2025 surging 44 per cent on the year. 

Vietnam also had some of the “most visible market-supporting policies” in Asean, such as “Doi Moi 2.0” – the country’s recent set of structural reforms, said JPMorgan analysts. 

Its public infrastructure spending is expected to stay the highest in the region in 2026 – which would boost key sectors such as banks, industrials and consumer discretionary. 

However, JPMorgan analysts are underweight on Thailand, despite expecting 2026 to deliver the “highest return” for Thai equity investors since 2021.

Fiscal stimulus, rate cuts and improved capital management are poised to support earnings growth amid low expectations, said the analysts said.

“However, we think the rebound will be capped as political uncertainty looms and there remains limited room for government spending to provide a further boost,” they added.

The Philippines was assigned a “tactical overweight” rating by JPMorgan analysts, as the government attempts to “boost growth” by raising spending on social programmes. 

Therefore, Philippine stocks are still “primed for a rebound in the near term”, they said. 

JPMorgan analysts assigned a “neutral” forecast to Malaysia and Indonesia.

While Indonesia’s fiscal stimulus should boost consumption near term, its banking liquidity and government budget sustainability should be monitored, they said. 

They also remained positive on Malaysia’s “overall stable macro environment” and selective growth catalysts from the artificial intelligence and technology sectors, despite its tariff risk exposure.