The outlook for Asian equities remains favourable going into next year amid the pick-up in global growth and a rise in domestic consumption, according to ING Investment Management.
As the year progresses, however, the asset manager advises investors to lock in profits and move to more defensive stocks such as consumer staples and utilities.
'Right now we are in a sweet spot,' said Ad van Tiggelen, the deputy head of global equity investments. 'This means we have a situation where the economy is already picking up, earnings are picking up, but interest rates are not going up yet. This is historically always a good period for equity investments.'
Companies around the world were showing earnings growth of more than 10 per cent this year, which was rare, he said.
ING also forecast the global economy was on track for above par growth of more than 3.5 per cent next year, while Asia excluding Japan should post expansion of 6 per cent.
Among the risks to this scenario would be the possibility that reduced effects from fiscal stimulus and monetary easing were not compensated by a rise in capital expenditures, a recovery in the global job market or a currency crisis, it said.