Asia's Fall a Distant Memory

Recently, he has recommended Taiwanese equity, which he says is still very undervalued. Darby specifically advises buying deep cyclicals such as Posco (PKX), Hyundai Steel, Daewoo Shipbuilding, Formosa Petrochemical, Honam Petrochemical and Mitsui.

"It's traditionally counterintuitive to recommend these types of stocks at the top of a market cycle, but analysts way underestimated their earnings at the beginning of the year," he explains.

Other recent big gainers in Asia have been banks, as deal flow picks up again in the region and investors are becoming excited again over the prospects of consumer retail lending as growth refuses the cooldown. Bank of America(BAC) today announced that it is entering into a joint venture with China's second-largest bank, China Construction Bank, providing credit card services to Chinese customers. Bank of America will end up holding 37% of the joint venture, which will be spun off as a separate company, the bank said. In 2005, BoA paid $2.5 billion for a 9% stake in China Construction.

And China CITIC Bank, one of China's only major players in the industry that is still private, began selling shares today to investors on the Chinese mainland and in Hong Kong; a dual listing is planned for later this month. The bank is raising HK$24.72 billion ($3.16 billion) in Hong Kong, and 11.51 billion yuan ($1.49 billion) in China, it said in a preliminary prospectus today. Investors include China Life Insurance (LFC), which is putting in HK$200 million -- about $25.6 million -- the prospectus said.

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