This week's question was premised on the view that markets are sluggish, with no asset class shining in particular. Mark Matthews (head of Asia research, Bank Julius Baer) likes Malaysia, which he describes as Asia's ultimate contrarian stock market for the past 13 years. 'Foreign fund managers have never quite got over the capital controls of 1998, and accompanying opprobrium toward Wall Street,' says Matthews. 'But because foreign investors are underweight in it, they are not the primary movers of the Malaysian market, so it tends to march to its own drum instead of to the ups and downs of global financial risk appetite.' Matthews lists six reasons why he likes Malaysia: He says Prime Minister Najib Razak has proven more competent in economic matters than was expected. The country is rich in the natural resources that are in demand from China and India. Higher wages on the mainland mean electronics manufacturing in Penang costs the same or is cheaper than in southern China. The central bank has been ahead of the curve in raising rates. The stock market, which has historically traded at a premium to the region, is now at parity. Finally, the ringgit should continue to appreciate in value at least as much as the renminbi. Carl Berrisford (theme-based research equity analyst, APAC, UBS Wealth Management Research) likes defensive high-yield stocks across Asia. 'The recent market correction means dividend yields have actually risen, and since many stocks pay out interim dividends over the summer months, passive investors can secure a yield while they are on holiday,' says Berrisford. He adds that most Asian currencies are appreciating against the US dollar, which will enhance returns if the dollar falls again. Berrisford says mainland tourism stocks provide exposure to a market valued at 1.5 trillion yuan (HK$1.8 trillion) and growing at an estimated 15 per cent a year. 'We especially like beaten-down Chinese domestic airline stocks, which have suffered at the hand of the Beijing-Shanghai High Speed Rail link. The substitution impact appears to have been exaggerated and if oil continues its retreat, jet fuel prices will follow to the benefit of airline stocks.' US-listed Chinese budget hotel stocks have been punished by the accounting scandals of unrelated Chinese listings and offer good entry points and solid fundamentals of a growth market, he says. Christian Nolting (lead strategist, Asia-Pacific region, Deutsche Bank Private Wealth Management) likes South Korea, especially exporters and manufacturers. A turnaround in the US economy and strong import growth from the mainland will be highly positive for South Korea, says Nolting. The mainland, Hong Kong and the US account for about 46 per cent of South Korea's exports. Nolting is also positive on mainland equity markets, with one eye on the consumer sector. While the mainland's gross domestic product growth is expected to slow from 10 per cent last year to about 8.7 per cent this year, Nolting expects consumption will make up a growing part of GDP. Among developed market equities, Nolting thinks US technology stocks, which have underperformed the broader market by more than 3 per cent year to date, should 'resume their leadership role over the next 12 months'. He notes that technology stocks are trading at a historically low P/E ratio relative to the S&P 500. 'However, the sector is expected to have above-average earnings growth in 2011 (14 per cent), exhibit solid upward revisions and maintain a healthy margin profile,' says Nolting.