Uncertainty rules

ON ASIA

Ashburton's Craig Farley says food and inflation concerns will lead to an uncertain investment climate.

Asian equities are at long-term fair value and, based on several metrics, the markets look moderately undervalued. Sentiment across the region is now in the neutral zone and far removed from the mass hysteria that encapsulated 2000 and late 2007. While modest deceleration in the pace of Asian real GDP growth is anticipated, consensus analyst EPS growth estimates have dropped sharply to less than 14% for this year. Should the global recovery continue, earnings across a broad range of sectors are well positioned to beat expectations. Road mapping the next year is difficult, yet historic...