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Scour Equities for Gems

The steady stream of headline economic figures hasn't been pretty. Export-dependent countries are sinking deeper into recession as overseas demand for their goods evaporate from the U.S., Europe and other big markets amid a global slowdown.

This week alone, fourth-quarter data showed Japan’s economy contracted at its sharpest pace since the oil crisis in 1974. Singapore’s key exports tumbled for the ninth straight quarter in January.

Salman Haider, managing director & head of wealth management at Citibank, warns of more bad news on the economic front that will keep equity and forex markets topsy-turvy.

“We are going to see 2009 dominated by economic headwinds that will continue at significant pace,” he says on CNBC Asia Pacific’s “Protect Your Wealth”. “For the first 6-8 months this year, investors will have to put up with very volatile markets.”

And as the earnings season goes into full swing, corporate results will have the wind knocked out of them as the numbers will reflect the impact of the global slowdown.

“Asian companies operate on a high operating leverage, that is (driven by) volume play rather than fat margins. In bad times without that high profit margin, the bottom line will come crashing down,” he explains.

However, there are bright spots in the midst of all the doom and gloom. According to Haider, “It is a good time to exploit value in equities. There are good quality companies that are trading at very cheap levels.”

He favors U.S. large caps as well as emerging markets. In Asia, he is eyeing Hong Kong, Taiwan, Korea and Malaysia, but underweight Japan and Europe. On a sector basis, he looks for defensive plays in healthcare, utilities and consumer staples.

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Catch "Protect Your Wealth" on CNBC's Asia Pacific network every Tuesday on "CNBC's Cash Flow," Wednesday on "Asia Squawk Box" and Thursday on "Capital Connection."