If there’s any place in the world to do business in 2026, it’s ASEAN: UOB research head

SINGAPORE - ASEAN stands out as an attractive place to do business, supported by a stable operating environment, favourable supply-chain realignments and the opportunities created by the

Johor-Singapore Special Economic Zone

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“This is a place to be, and the supply chain shifts are in favour of us. We are exporting a lot more to the US, selling to the rest of the world and also on our own, we have strong fundamentals – our population, our income growth – to support them,” said UOB head of research Suan Teck Kin.

Mr Suan, who was speaking at UOB’s 2026 market outlook webinar on Jan 7, noted that ASEAN will continue to benefit from supply chain shifts and trading with China.

He said: “ASEAN will continue to benefit from these supply chain shifts, selling more to the US, selling more domestically.

“China, as well as the US and Europe, companies are shifting production. You can see that from the foreign direct investment data that these things are still evolving and developing in our favour, and China is doing a lot more with the region. As long as China is holding up, we should be able to benefit from China’s continued growth.”

China has been ASEAN’s largest trading partner for over 16 years, while ASEAN has been China’s top regional partner for the past five. Bilateral trade surged to nearly $990 billion in 2024, with projections exceeding $1 trillion by the end of 2025. Electrical machinery, mineral fuels and agricultural products are among key exports from ASEAN.

Mr Suan noted that it was still business as usual for South-east Asia exports and imports despite threats from US tariffs in 2025.

ASEAN also comes out top as an investor destination. “ASEAN is top of the league in terms of foreign inflows in investment,” he said, adding that investors tend to park money in Singapore because of its financial centre status.

UOB estimates that prospects for ASEAN over the next five to 10 years are still positive.

UOB senior foreign exchange strategist Peter Chia said that even against the backdrop of a US-China trade war and concerns of a China slowdown, most Asian currencies gained against the US dollar.

“Half of the battle was won because the US dollar was weak in the first place. But the gross domestic product profile for Asia was remarkable last year, with Singapore’s 4.8 per cent growth, and even China had met their target of 5 per cent last year. That has caused the Asian currencies to strengthen,” he said.

“For Asian currencies, often they look towards the renminbi for leadership and the trade war was relatively short. So you can see that once the renminbi starts to stabilise, it also adds another dimension, or another source of support for Asian currencies to rally towards the end of the year.”

UOB Asset Management (UOBAM) on Jan 7 announced it is set to launch an ASEAN Dividend Index exchange-traded fund (ETF) on Jan 29.

At the point of listing, it will be the only dividend-focused ASEAN ETF to be listed on the Singapore Exchange.

“As investors seek to enhance income and strengthen long-term total returns, ASEAN has emerged as an attractive destination for dividend strategies, supported by robust economic fundamentals and a broad base of companies with established dividend track records,” the firm said.

“The region also offers a diverse mix of growth-oriented and established economies, creating opportunities for portfolio diversification across different market cycles,” it added.

The ETF counts local banks DBS, OCBC and UOB, and other notable names such as Malaysia’s Malayan Banking, Indonesian conglomerate Astra International and Thailand’s oil and gas company PTT, among its top constituents.

UOBAM said the ETF is aiming to pay annual dividends of at least 6 per cent in 2026 and 2027.