Equity markets in the Asia-Pacific region are only at the early stages of recovery and are not likely to see substantially positive changes over the next nine to fifteen months, a report by regional investment specialist MTS Research reveals.

In January the company predicted a continuing drop in Asia Pacific equity markets this year and this was confirmed by February figures. The Hang Seng Index was down 4.1 points from January to February and the Straits Times Index dropped 54.55 points, while the Taiwan Weighted Index slumped 379.33 points. Declines were seen in all the other key indices in the region, MTS Research said.

"The most obvious scenario globally would be for Western markets to bottom not too far from current levels, and then trade sideways. The risk for the Pacific is that it bounces more weakly, and has a longer and deeper correction while Western indices merely return to the bottom of their recent range," Peter Beutell, the founder and managing director of MTS Research, said in a statement.

According to Mr Beutell, the crisis had led markets to hit short-term oversold levels. However, while global equity markets began correction patterns in late 2008 or early 2009, with most already reaching targets as of the end of last year, Asia Pacific markets do not appear to have adequately developed recovery patterns - thereby suggesting that a deeper correction and a much longer wait is expected.

"The regional correction has probably not run its course," Mr Beutell said.

A separate study by BofA Merrill Lynch Research appears to chime with these results, revealing that Chinese stocks are the worst performers for the year, owing mostly to "misinterpretation of the latest tightening policies by the Chinese government," as noted by strategist David Cui in a statement on 3 February.

The Shanghai Composite Index was down 8.8 per cent this year, while the Hang Seng China Enterprises Index dropped 9 per cent.