That was hardly surprising - many Asian economies were mired in their worst recessions in more than 60 years. At the start of last year, however, managers began moving back in, but gingerly, keeping one eye on the exit. After a surge in confidence that boosted Asia ex-Japan stocks some 68 percent in 1999, the sense of caution returned. The group is down more than 7 percent through mid-August. As these meanderings suggest, investor consensus on Asia is hard to discern these days.
Most portfolio managers are bullish about much of North Asia and quite bearish about South Asia.
Yet individual companies in Singapore and India, South Asian mainstays, remain investor favorites. The southern tier generally isn't keeping pace with its northern counterpart. The world is very rapidly passing these countries by. Despite the misgivings about South Asian stocks, foreign exposure to Asia as a whole has increased significantly in the past two years. Partly as a result, Morgan Stanley Capital International increased the weightings of several Asian countries in its emerging markets free index in June.