Investors can be cautiously optimistic about prospects for shares in Asia next year, with modest gains possible as a consumption-led recovery gathers pace in the second half, according to Indocam Asset Management.
Equities might also post rises in the United States - with the Dow Jones Industrial Average testing the 10,000-point level - as growth in the world's largest economy slowed but avoided recession, Indocam said yesterday.
Indocam chief strategist Miron Mushkat said: 'We are building our investment strategy on the assumption that domestic demand will revive . . . We are close to the bottom.' He said investors could take heart from the forecast that while global growth might drop next year, the slowdown would be neither severe nor protracted.
Any slippage in demand for Asian-made goods in the developed markets of the US and Europe could be more than offset by a rebound in intraregional trade, he said.
'There [has been] a hole there in markets in Asia for exports from Asia,' Mr Mushkat said. 'We expect this to change.' He said sales of Asian-made goods across the region could pick up as the crisis-hit economies continued to stabilise, with exchange rates finding a more level tone, interest rates dipping and many governments on a expansionary track.
The Hang Seng Index was seen at 12,500 points a year from now - about 25 per cent higher than yesterday's close.
