Asian stock markets are poised for another strong performance in 2004, boosted mainly by regional liquidity and the region's better-than-expected economic performance, Standard and Poor's said in a report.
"Asian liquidity is ample and rising, and likely to persist for the next 12 months," Steven Koh, S and P's Asian equity strategist, said in his outlook for regional bourses.
"2004 may be another vintage year for Asian equities," he said.
Adding fuel to the regional bourses is the resurgent US economy, where corporate earnings are set to improve as economic activity continues to expand at a healthy pace, the global ratings agency said.
But terrorist attacks as devastating as those on September 11, 2001, a recurrence of the Sars epidemic and a US-China trade war could dent the optimism forecast for Asian bourses, S and P said.
Koh predicted Asian bourses will see an upsurge of 15 to 20 percent, benefiting mainly the equities markets in Hong Kong, Indonesia, South Korea and Malaysia.
Bourses that may experience a little of the widely predicted upsurge include Japan, Singapore, Taiwan and Thailand, while those likely to lag in the region are Australia, China, New Zealand and the Philippines.
In China, Koh said the market "appears to suffer from over-stretched valuations" and the year was likely to be marked by economic reforms by Beijing.
"We expect 2004 to be a year of economic reforms that would encompass a comprehensive round of tax reform such as expanding the tax base, improving tax collection and possibly reducing taxes," Koh said.
In Hong Kong, the Hang Seng index is tipped to register a rise of 20 percent, S and P said.
It has given an 'overweight' rating on Malaysian equities with the Kuala Lumpur Stock Exchange composite index expected to rise 15 percent.
In neighbouring Singapore, S and P has raised its 12-month target for the main Straits Times Index by 15 percent to 1,977 points.