Merrill favours India, China markets_3847

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The bank forecast the Asia-Pacific region excluding Japan would expand by 5.2 per cent in 2003 compared with forecasts of 2.6 per cent growth in the United States and 1.2 per cent in Europe. China's growth is forecast at 7.8 per cent.
Dominic Lau in Hong Kong 
   January  16, 2003 17:28 IST
Merrill favours India, China markets
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Merrill favours India, China markets
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"We are very much grinding through the gears here rather than straight line accelerating," Spencer White, head of Merrill's Asian equity strategy, told a news conference.
Equity investors looking at Asia,You are not allowed to view links. Register or Login, which is expected to outpace US and European economic growth in 2003,You are not allowed to view links. Register or Login, should bet on India, Thailand, China, and South Korea,You are not allowed to view links. Register or Login, Merrill Lynch said on Thursday.
The US investment bank said earnings growth in the region would struggle to exceed single-digit levels and investors would be better off focusing on stocks paying higher dividend yields.
The bank is underweight on Singapore, Indonesia and the Philippines, while it rated Taiwan, Hong Kong and Malaysia as neutral.
Merrill said the four Asian markets?-- India,You are not allowed to view links. Register or Login, Thailand, China, and South Korea -- along with Australia offer strong domestic growth and corporate earnings in the countries are more resilient to any downturn in the global economy.
"Pricing power tends to dominate our new sector allocation. We are focused on the materials and energy sectors and defensive, high-yielding, cash flow generative sectors such as utilities and consumer staples/healthcare," it said in a report.