Asian equities offer attractive outlook in 2007

• Strong domestic demand, strengthening currencies and a 12.5% 2007E EPS growth to drive the Asian equity markets up 12% in 2007.
• Overweight China and Japan – most attractive upside potential to our 2007E index targets, and Taiwan and Korea – highest earnings growth in the region. Singapore remains our top asset reflation play in ASEAN.
• Aggressive overweight on Asian financials for domestic-driven earnings profile, and overweight on tech sector for valuation and growth appeal.
  
• Neutral on Hong Kong, Malaysia and Thailand; we recommend that investors underweight Indonesia and Australia.
  

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