As fears of a global recession mount, one analyst recommends taking shelter in select Asian banks, utilities and energy plays.
"Emerging Asian banks (will be) relatively sheltered from what's going on globally. They will still have positive loans growth," Lorraine Tan, Asia Director at Standard & Poor's Equity Research, told CNBC on Tuesday.
Despite worries about the asset quality of Chinese banks, Tan continues to like large Chinese financials. She feels that China’s projected 9 percent-plus growth in 2011 and 8.5 percent in 2012 should help buffer asset quality.
Tan also said the 13 percent fall in oil prices over a two-week period starting end–July should be good for power companies in China as it would lower fuel costs.
"However, our preference would remain for those with regulated (state-owned) assets as it means greater dividend certainty," she said.
Oil prices had fallen on growing concerns the U.S. economy could go into a double-dip. Tan forecasts U.S. growth to ease to a sub-2 percent full year rate in 2011 and next, and this could mean lower growth expectations for Asia. But she sees a slim chance of a recession.
"While U.S. growth may be notched lower, our base case scenario still calls for growth and this should enable global demand to remain positive,” she said
Demand, coupled with continued supply constraints, was likely to be beneficial for energy plays in Asia, as long as oil stayed above $80 a barrel.