`RI to be top performing market in Asia in 2003'

`RI to be top performing market in Asia in 2003'

Agence France-Presse, Hong Kong

Indonesia is expected to be the top performing equity market in Asia for 2003, followed by Malaysia, Thailand and Hong Kong, ING Financial Markets said Monday.

Indonesia was ING's top performing equity market for 2003 with a 12-month target of 500 points, up 29 percent in U.S. dollar terms, followed by Malaysia and Thailand, both up 23 percent to 765 points and 450 points respectively.

ING's 12-month target for Hong Kong's Hang Seng index is 11,000, up 8.0 percent.

The Philippines's market is expected to be the worst performer, with a 12-month target of 1,010 points, representing a five percent decline in U.S. dollar terms, it said.

ING is predicting U.S. dollar returns of 17 percent for Asian equity markets as measured by the MSCI Far East Free ex-Japan index, supported by regional earnings growth of 12 percent in 2003.

ING said it believes Hong Kong will be among the slowest growing economies next year, with only a 2.5 percent increase in gross domestic product (GDP).

But ING chief Asia strategist Markus Rosgen said this had been factored in to most share prices and there are increasing signs the local economy is bottoming out.

ING said Asian economies will have to look again to domestic consumer strength as a key to sustained economic growth, and that South Korea, Malaysia, and Thailand will be the key beneficiaries of strong domestic consumer demand.

"Elsewhere export-dependent countries such as Hong Kong, Taiwan and Singapore will continue to suffer from a persistence of deflation or very low inflation and low gross domestic products growth, as United States demand remains anemic throughout 2003," ING said.

China will be the fastest growing economy at 7.8 percent, followed by South Korea at 5.5 percent and Malaysia at 5.0 percent, it said.

ING chief economist for Asia Tim Condon said the U.S. economy is likely to see a contraction in the first quarter of 2003 as uncertainties about developments in Iraq start to weigh on consumer confidence and spending, which will flow through to economies globally.

ING expects GDP growth of 1.2 percent in the United States next year, although growth is expected to pick up markedly in the second half of the year.