Asian Markets Could Get Hit Harder by a Prolonged Iran Conflict |Insight with Haslinda Amin 3/4/2026
Speakers
Summary
- Geopolitical Shock: A conflict with Iran has effectively closed the Strait of Hormuz, halting 1/5 of global energy supplies. President Trump has pledged naval escorts, but insurance costs have skyrocketed (from $200k to $500k per tanker).
- Market Bifurcation: The US is viewed as relatively resilient due to energy independence ("Net Neutral"), while Asian economies (Korea, India, Japan) are suffering severe capital flight due to heavy reliance on imported oil.
- The "Parabolic" Correction: South Korean markets (KOSPI) triggered circuit breakers, down significantly. This is attributed to a "sell the news" event on AI/Chip stocks (Samsung, SK Hynix) combined with the oil shock.
- Private Credit Shakeout: Apollo CEO Marc Rowan predicts a "correction" in private credit similar to the 2008 banking crisis, where dominant players with strong risk management will consolidate market share while smaller, aggressive players fail.
- AI Infrastructure Resilience: Despite the war, the CEO of Delta Electronics Thailand confirms that AI data center build-outs (hyperscalers) remain on track for 2026/2027, with power density requirements jumping from 30kW to 300kW per rack.
Trade Ideas
Aziz notes India imports ~85% of its oil and faces a "large macro shock" if oil stays elevated. Ajay adds that the "rotation away from the US to Asia" seen in recent months will reverse because Asia depends on the Strait of Hormuz, while the US does not. Higher oil prices act as a tax on Asian economies, widening current account deficits (especially India) and crushing corporate margins (Korea/Japan). This triggers capital flight back to the US Dollar. SHORT Asian importers (India/Korea) to hedge against prolonged energy disruption. If the Strait of Hormuz reopens quickly (under 2 weeks), these markets could snap back violently.
Rowan predicts a "correction" in private markets but notes, "The dominant banking institutions of today were not as dominant pre-crisis... those that sat out subprime lending have risen." A market shakeout in private credit will flush out inexperienced, smaller players who took on bad risk. The "Fortress Balance Sheet" firms (Apollo, Blackstone, KKR) will acquire distressed assets at a discount and consolidate the industry, emerging stronger. LONG the "Big Three" Alternative Asset Managers. Systemic regulation or a deeper-than-expected recession causing defaults even in high-quality portfolios.
Ajay Rajadhyaksha
Global Chairman of Research, Barclays
Ajay states, "I still like Precious Metals... I think that's the safest place." He also notes that Copper is in a "structurally bullish demand supply dynamic" regardless of the war. In a geopolitical crisis where equities are repricing and inflation fears are resurfacing due to oil shocks, gold acts as the primary hedge. Copper is decoupled from the war risk due to the secular electrification trend. LONG Gold as a haven; LONG Copper on dips. A rapid de-escalation of the war could cause a temporary pullback in gold prices.
Commander Kirk Lippold
Former Naval Officer
Lippold mentions the US is using "$4 million missiles to destroy $20,000 drones" and warns, "We will exhaust inventory." The asymmetry of cost and the high burn rate of munitions in a prolonged conflict necessitates massive replenishment orders from the Department of Defense. This directly benefits the prime defense contractors manufacturing interceptors and missiles. LONG Defense Primes. Political pressure to reduce defense spending or a sudden ceasefire.
Victor Cheng
CEO, Delta Electronics Thailand
Cheng confirms that despite the war, "AI is in the middle of unprecedented buildout" and power requirements are surging from "30 kilowatts... to 300 kilowatts or even megawatt" per server rack. While Delta Electronics Thailand (OTC: DLEGF) is the direct play, the US-listed proxies for Data Center Power and Thermal Management are Vertiv (VRT) and Eaton (ETN). The war does not stop the capex cycle of hyperscalers (Microsoft/Google/Amazon). LONG Data Center Power/Cooling infrastructure. Supply chain disruptions in shipping components from Asia to the US due to the conflict.
Up Next
This Bloomberg Markets video, published March 04, 2026, features Jahangir Aziz, Marc Rowan, Ajay Rajadhyaksha, Commander Kirk Lippold, Victor Cheng discussing INDA, EWY, APO, BX, KKR, GLD, CPER, LMT, GD, RTX, VRT, ETN. 5 trade ideas extracted by AI with direction and confidence scoring.
Speakers: Jahangir Aziz, Marc Rowan, Ajay Rajadhyaksha, Commander Kirk Lippold, Victor Cheng · Tickers: INDA, EWY, APO, BX, KKR, GLD, CPER, LMT, GD, RTX, VRT, ETN