EM & APAC Equity Strategy: APAC 2Q26: positioning cheat-sheets ahead of earnings season

Research evidence excerpt

EM & APAC Equity Strategy: APAC 2Q26: positioning cheat-sheets ahead of earnings season

Figure 3StockswhereUBSanalystsareexpectinganegativesurpriseonconsensusfor2Q25.

Buy-side positioning: Which parts of APAC are crowded?

Leveraging on UBS Quant Research's proprietary crowding score, we identify the most

crowded markets/sectors in APAC (Figure 4InAPAC,Japan,AustraliaandTaiwanhaveveryhighcrowdinglevels,whileMalaysia,IndonesiaandChinahavethelowestcrowdinglevelsrelativetotheirownhistoryAmongmajorAsianmarkets,Korea,TaiwanandSingaporehaveveryhighcrowdinglevels,whileMalaysia,PhilipinesandIndonesiahavethelowestcrowdinglevelsrelativetotheirownhistory). In 2Q26, crowding rose in Japan and

slightly higher in Asia ex Japan, while Australia declined. Korea and Taiwan were higher,

while China and India saw declines. Crowding in the Philippines rose during the quarter,

while the rest of ASEAN fell, led by Singapore. Among sectors, IT, Comm Services and

Consumer Disc remain the most crowded longs in Asia ex Japan, while Utilities and

Energy are the most crowded shorts. In Japan, IT, Health Care and Industrials are still the

most crowded longs. In Australia, Materials and Energy are now the most crowded

longs, while Financials and Health Care are the most crowded shorts. We look at UBS

analysts' earnings expectations together with UBS Quant Research's crowding score,

which has shown to generate superior alpha and help identify risks (see more here).

Stocks where short positions have built recently (i.e. low crowding), but our analysts see

potential for positive surprise from results, include National Australia Bank (NAB AU),

BYD (1211 HK), Bank Central Asia (BBCA IJ), Terumo (4543 JP) and HD Hyundai

Heavy Industries (329180 KS). We expect a negative earnings surprise from Delta