Asia‘s Households Rebalance: Asia Compass | Asia Pacific

Research evidence excerpt

Asia‘s Households Rebalance: Asia Compass | Asia Pacific

Idea

June 18, 2026 01:15 AM GMT

Morgan Stanley Asia Limited+MAsia Compass | Asia Pacific Magdalena L Stoklosa, CFA

Director of Pan-Asia Research

Asia's Households Rebalance Magdalena.Stoklosa@morganstanley.com +852 2848-8811

Retail savings mobilization across Asia has been an important part of the

region’s Market Reform agenda and the continued push toward equitizationz;

Across the region, capital markets are being reshaped to better fund innovation and

strategic capex. This is a transformative shift, and it’s still far from complete.

Five of the largest capital markets are working through major reforms across

governance, transparency, and balance sheet optimization, all with the aim of

improving shareholder returns. At the same time, the transformation of domestic

savings pools in Japan and India has been critical in supporting local markets and

sustaining equity flows. Australia’s pension system, the largest pool of pension

assets globally, continued to have a clear long-term impact on its domestic equity

market valuations, while China has provided broad support to its IPO market.

These capital market and governance reforms are already having a visible impact,

whether through improving ROE, valuation re-ratings, or both, as we have seen in

Japan, China, Korea ,and Singapore.

Korea is a particularly important example. After decades in which household wealth

was built primarily through real estate, with a persistent preference for cash and

deposits, household equity holdings rose 48% year over year in 2025, compared

with a prior decade-long average annual increase of just 7.4%. This marks a striking

inflection in Korean households’ appetite for risk assets, and we are closely watching