2021 was a year to forget, with APAC falling 2% up to the time of writing and underperforming global equities by 18%, but we expect Asia to perform better in 2022. The P/E de-rating should end, allowing the full benefits of strong EPS to flow through. Asia tends to outperform on the upside in advance of Fed rate hikes, which we expect to begin in 4Q22. Reduced oil price pressures should help. Valuations relative to global equities are very cheap. Convergence of fiscal and monetary policies with Western DMs should boost the relative performance. A fairly neutral reading on our Tactical Indicators and a middling outlook for EPS revisions temper our enthusiasm, but we believe a target for MSCI APAC of 212, equating to 8% upside, is achievable. Our initial thoughts are that risks from the new South African variant are manageable. Vaccines will likely retain significant protection, and the new Pfizer and Merck antiviral pills likely will remain effective against new variants. It is possible that the new variant is more contagious but less deadly in line than previous variants, as typically happens in the evolution of viruses.