Funds management group BlackRock has backed Taiwanese equities to outperform the other global markets in 2011.
The opinion was expressed as part of a presentation of the manager's top 10 predictions for the year during its Australian retail roadshow event.
"Out of all of the equity markets in the world it's probably our favourite market for 2011," BlackRock investment specialist Vincent Lo Bianco said.
"They are building closer ties to the Chinese economy. It is in our view a better exposure to direct investment in China. There is low unemployment and an increase in domestic demand."
In regard to equities in general, Lo Bianco said he expected them to perform better than cash and bonds throughout the current year.
"It's not that we're looking for bond markets to have a tremendously poor year, it's just simply the outlook for equities, particularly in the area of multinational large-cap corporations," he said.
He said he was also anticipating a continued rally in oil prices.
"There are two reasons for believing oil prices will continue to rally. One part is the demand side, which we think on that one our growth outlook is still very positive," he said.
"The other thing is the uncertainty in the Middle East and the uncertainties that are happening in the region means oil deserves to have a risk premium built into it."
Other predictions were that resources would continue to outperform other sectors, Canadian two-year bond yields would rise relative to those in the United States, Asia ex-Japan interest rates would rise, the US yield curve would flatten, the Australian dollar would underperform other commodity currencies, the US dollar would outperform the yen and Asia ex-Japan currencies would also outperform.
Overall, 2011 would see less correlation between asset classes, allowing investors the opportunity to construct solid diversified portfolios, Lo Bianco said.
