KUALA LUMPUR, July 13 — Artificial intelligence, energy independence, and national security are set to drive the next wave of strategic investments and fuel global corporate earnings, according to HSBC Private Bank.

In its Q3 2026 Investment Outlook, the bank notes that rising global competition and shifting security priorities are creating the urgency and policy support necessary to sustain capital market activity. With traditional funding gaps persisting, HSBC expects private markets to play an expanded role in supplementing investment.

Despite global headwinds, HSBC maintains a bullish outlook on the resilience of the global economy. Drawing on lessons from the Covid-19 shock, the bank observes that governments and businesses have successfully diversified supply chains and energy sources to insulate growth.

Willem Sels, Global Chief Investment Officer, HSBC Private Bank and Premier Wealth, warned that volatility is here to stay.

“The priority is to stay disciplined with resilient and diversified multi-asset portfolios that can withstand short-term uncertainty, while keeping sight of longer-term opportunities emerging from structural growth trends,” Sels said.

The bank’s current strategy focuses on a “barbell approach,” balancing high-growth innovation in semiconductors, data centres, and AI adopters with stable, inflation-linked cash flows from infrastructure and gold. This is paired with a geographical focus on mainland China, Hong Kong, Singapore, and South Korea.

Desmond Kuang, Chief Investment Officer for Asia, noted that Asia is uniquely positioned to benefit from the AI surge given its leadership in semiconductors and rapid progress in large language models.

Beyond AI, he pointed to broadening opportunities in bonds and corporate governance reforms across the region.

Regarding the local outlook, Kuang described Malaysia’s economic momentum as stable. While GDP growth moderated to 5.4 per cent in the first quarter, HSBC views this as a natural normalisation rather than a loss of momentum, maintaining a full-year 2026 GDP growth forecast of 4.5 per cent.

Kuang highlighted that domestic inflation remains largely benign, supported by subsidies that keep petrol prices stable. Furthermore, Malaysia’s status as a major net exporter of natural gas provides a strategic advantage amid the ongoing Middle East conflict, insulating the country from some of the volatility affecting other energy importers.

“Despite external volatility, resilient domestic GDP growth and steady corporate earnings are providing support for the Malaysian equity market,” Kuang said, adding that the bank retains a neutral outlook for the country.

According to HSBC, geopolitical developments are creating an uneven economic landscape, making it imperative for investors to distinguish the winners from the losers across sectors and regions.