GLOBAL equities have started the year badly and the moves of the past week were likely warnings of big trends for the year including weakness in equities, DBS said in an Investment Insights note.
"The moves of the past week were likely warnings of big trends for the year - weak equities, a strong yen, weak Asia ex-Japan and commodity currencies, and resilient developed-market government securities ... Our core call for 2016 remains: equities will likely trade lower through the course of the year."
But it also sought to soothe fears over China, saying that a crisis in China was a "low probability event".
"Chinese economic growth will likely continue to slow; the CNY (yuan) weaken; foreign exchange reserves decline; and the stock markets trade lower in a highly volatile manner. But none of these pose systemic risk. This is a policy-engineered slowdown to restructure the Chinese economy."
For South-east Asia, DBS said it was "defensive in the region" in Q1 2016 but would "look to be increasingly positive on Indonesia and Philippines on a 12-month view". It added that the Singapore dollar could surprise on the upside and hence fund flows could return to Singapore.