Following the recent sharp declines in Asian equities, any further share price corrections would be good for the financial health of the region and create opportunities for investors, says Aberdeen.
It adds that given an uneasy global market environment, 2008 is likely to be a much tougher year for Asian equities and investors need to be alert to specific risks.
Aberdeen says these involve the increasing possibility of a US recession, which would impact Asia’s export-related companies, unsustainable disparities in valuations both between and within markets and rising inflation.
Aberdeen Asset Management Asia Limited managing director Hugh Young says recent share price falls in Asia are not surprising.
He says: “Housing and credit market problems, record oil prices and rising inflation make the US economy increasingly fragile. We expect the nervousness that has been building in markets for the past couple of months to continue, with investors in Asia watching for signs of an export slowdown.”