Everyone is asking whether the Asia is seeing a sucker's rally, but Credit Suisse's Sakthi Siva isn't worried.

The MSCI Asia Pacific Index is up 13 percent since mid-December after falling 17 percent last year.

Bears have pointed to a supposedly unsustainable surge in foreign buying. Siva sees it differently:

Net foreign buying of US$14 bn YTD. Are we now overbought? We do not believe so.

We prefer to look at net foreign buying as a % of market capitalisation. While net foreign buying so far this year of US$14 bn looks large particularly given net foreign selling for all of 2011 of US$16 bn, we prefer to look at net foreign buying as a % of market capitalisation. The full report highlights that on a rolling 12-month basis, net foreign buying has just turned positive at 0.1% of market capitalisation. This compares with 2.2% of market capitalisation in April 2010 and 1.6% of market capitalisation in January 2011.

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