Indian equities have delivered the third worst returns in the Asia-Pacific region since January. The under performance is likely to continue given the relatively higher implied Return on equity (RoE) amid downgrades in expected earnings per share, says Sakthi Siva, head of Asia-Pacific and global emerging markets equity strategy at Credit Suisse. The Switzerland-headquartered brokerage believes that while investors are worried about China’s slowing economic growth. But, India too is facing systemic risk, which has prompted the brokerage to reiterate ‘Underweight’ stance on the country. Credit Suisse has the biggest underweight on India along with Australia. There are two reasons why brokerage is underweight on India. First, the implied RoE of the market stands at 18.5 per cent as compared with actual RoE of 13.5 per cent, which suggests that there is a big disconnect between the asking rate indicated by the market for the corporate profi ts and actual figures. Historically, India has always underperformed once its premium to the region reach 50 per cent. The other reason is that India continues to witness signifi cant earnings downgrades.