Emerging Asia’s equities have risen by more than the global average so far this year, but we do not expect the outperformance to last. Stock markets in Asia typically underperform developed markets during bad times and the coming year is likely to be difficult. Most notably, the euro-zone is slipping into a recession which we expect to be deep and prolonged and to lead to a break-up of the single currency area. The resulting shock to confidence is likely to drag Asian equities back down.