MUMBAI Feb 25 Investment bank Macquarie has
deepened its "underweight" stance on Thailand, warning that
"simmering civil war" will have a more fundamental impact on
valuations as the Southeast Asian country is battered by violent
In its latest rejig of its Asia ex-Japan portfolio,
Macquarie also reduced its "overweight" stance on Korean
equities. The bank said that while the domestic story remains
strong, it is concerned that as government stimulus fades, real
estate-driven increase in lending and consumption would not be
sufficient to propel the Korean economy and equities.
South Korean shares hit a one-month high on Tuesday as
sentiment was boosted by a record-breaking performance on Wall
Street and plans from the South Korean government to improve
Asia's fourth-largest economy.
Macquarie reduced its "underweight" on Indonesia saying it
was only at the very early stages of reining in domestic demand,
while maintaining "overweight" on the Philippines as it has the
best promise of "reform inspired growth". High imports and a
weak rupiah have put a strain on Indonesia by widening its
Last week, JP Morgan also upgraded Indonesia and Philippine
shares to "overweight" from "neutral" in its global emerging
markets model portfolio, citing a reduced perception of risk due
to stability in some currencies and improving current accounts.
Macquarie remains "underweight" on Malaysia and India citing
concerns about high levels of domestic debt and exposure to
volatility in the global environment, respectively.
(Reporting by Abhishek Vishnoi; Editing by Jacqueline Wong)