With Asian markets stuck in a holding pattern, further downside
is an opportunity to add risk to portfolios, HSBC said in its
second quarter equity strategy report.
"We continue to like markets and sectors that are
under-owned, offer a good long-term growth story, where earnings
could surprise on the upside and trade at reasonable
valuations," HSBC strategists wrote in a note.
HSBC upgraded Singapore to 'overweight', saying it is one of
the more stable, low beta Asian markets with low earnings
volatility, and raised Thailand to 'neutral', partly reflecting
valuations that looked better than other ASEAN markets.
It reiterated the 'overweight' rating on Indonesia due to
the country's resilient growth model and favourable monetary
policy while remaining neutral on Malaysia, citing the
pre-election government hand-out, ongoing tightness in labour
market and low interest rate as being supportive to consumption.
The bank kept 'underweight' on the Philippines, which is
seen as one of the world's most expensive equity markets. The
Philippine main index has risen 17.3 percent so far this
year, Asia's fourth best performer.
1631 (0931 GMT)
(Reporting by Viparat Jantraprap in Bangkok; Editing by Jijo