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By Christine Gaylican, Opalesque Asia:

As the emerging market governments in Asia are poised to lift the financial stimuli in mid-2010, J.P. Morgan enumerates the different sectors and industries in each country, though emphasizes the consumer-related products in China. And a related study of McKinsey illustrates that in order to sustain the growth supported by the financial stimulus, more structural adjustments in wage policies should be made by China's national government.

JP Morgan: first phase of the liquidity-led rally is now over

Hong Kong-based J.P. Morgan Asset Management, in its report “Investment Alert: JF Asia Domestic Opportunities” for October-09, that gains in China, India and Indonesia are now coming from strong corporate and industrial performance (Source).

Although JP Morgan still gives preference to China, it cannot deny the substantial performance brought in by India, South Korea, Indonesia, and Macau, which cascaded to their respective economies despite the raging global financial meltdown and near-death of their export industries.

“We believe the first phase of the liquidity-led rally is now over and that the second phase of the market uptrend will be driven more by earnings growth,” the commentary said.

J.P. Morgan has reduced some of their large-cap positions in China e.g. China Mobile and added some small-mid caps wher......................

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