It also expects the United States to see its worst recession in 25 years.

'We expect only a moderate recovery in economic activity in the US and Europe towards the end of next year, with risks remain skewed to the downside,' said Mr Thomas Kaegi, senior economist at UBS Wealth Management Research on Friday.

He said that Singapore and Hong Kong already posted negative growth rates during the second and third quarters of this year, slipping into recession.

'Without being able to identify any significant growth drivers, we're therefore pessimistic on the domestic physical property markets of Hong Kong and Singapore,' said Mr Kaegi at a media conference on Friday.

Mr Kaegi added that Asian equity markets will continue to be volatile next year.

He favours so-called 'deep value stocks' - companies with strong franchises and healthy balance sheets trading at steep discounts to inherent value.