Hong Kong is especially vulnerable to volatility in the U.S. and China given that its currency is pegged to the dollar and therefore tied to U.S. monetary policy, while many of its companies depend on China for their earnings.

China
The outlook is no better in China, where the Morgan Stanley strategists now forecast the CSI 300 Index to fall into a bear market that will last for the next year. Alongside the standard emerging-market and trade-war pessimism, deteriorating liquidity conditions in China and a weaker yuan will also weigh on stocks, they said.

CICC, meanwhile, slashed its year-end estimate for the Hang Seng China Enterprises Index to 14,000 from 16,000 as company multiples are unlikely to expand as much as previously thought due to tighter liquidity conditions both at home and globally.

Philippines
Asia’s worst-performing equity index this year, which entered a bear market Thursday after a 22 percent drop from its January peak, won’t be able to pull out of its own swoon unless the Philippine central bank does more to help the stock market recover, according to the nation’s biggest money manager.

Fritz Ocampo, who manages about $19 billion as chief investment officer of BDO Unibank Inc. in Makati, said the central bank’s second interest rate hike this year isn’t enough to fully arrest the peso’s slide.

“We may have not seen the bottom yet,” Ocampo said.

Malaysia
Meanwhile, a stunning May election that ended six decades of rule by the same party has led to even more selling in Malaysia, with stocks plunging for a ninth straight day.

Investors adjusting to a new prime minister seeking to shore up the nation’s debt have fled the market, while analysts have cut earnings forecasts so much that Malaysia has overtaken South Korea as the Asia Pacific market with the biggest downgrades in profit projections this year.

“The short-term outlook for Malaysian equities will remain tough as the new government is trying to find out the depth of the financial issues,” said Christopher Wong, senior investment manager for Standard Life Investments in Singapore.

What’s Next?
While the bears are plenty, Maybank Kim Eng strikes a more optimistic tone. Investors should look beyond the short-term noise and focus on the region’s long-term growth prospects, John Chong, head of the investment-banking arm of Maybank said at its Invest Asia U.K. conference in London.