Contents
Time to slay the dragon? 3
With the furor over tightening, markets have begun to correct on slower growth. We
view this as the start of a turn, with tightening driving an even heavier sell-off. Ashares
are likely to have passed their peak for the year. Underweight China
3
Overview 3
The correction continues; we Underweight China tactically 3
Asset allocation into Asia looks complete 5
Strong liquidity is beginning to stretch Asian valuations 6
US corporate profitability could disappoint in 3Q 8
But has anything really changed in Asia? 12
Are markets now just a liquidity play? 13
Investment recommendation 15
Funds flow as % of total funds into Asia 17
PE band charts 21
Price-to-book charts 25
Earnings momentum 29
Equity risk premium 33