Global markets endured a wild ride in 2025, with the acceleration and deceleration of geopolitical tensions shifting investor sentiment throughout the year. Despite this, equity markets are set to close out the year in the green, supported by strong fundamentals and optimism around the benefits of AI adoption across businesses.
Returns were driven by both multiple expansion and earnings growth, with the latter doing more of the heavy lifting over the year. Emerging markets (EM) was the standout performer of 2025, benefiting from multiple tailwinds including strong earnings growth, weaker US$ and improved regulatory conditions for investors.
Our local benchmark lagged global peers throughout the year, as valuations across index-heavy major banks fizzled and expectations of further interest rate cuts dwindled towards the end of the year.