Friday, September 17, 2021

Asian shares’ relative valuations to global peers at 14-month low

The relative value valuation of Asian equities compared to their global counterparts is at a nearly 14-month low, data shows, following their underperformance this year due to slow growth and concerns over the spread of the delta-version of the coronavirus.

According to Refinitiv data, the 12-month P/E ratio of the MSCI Asia-Pacific Index stood at 14.9 compared to the P/E ratio of MSCI World of 18.46. The data shows that around 20 per cent valuation discount is the highest in 14 months.

PE of the MSCI Asia-Pacific and World Index

Yug Times PhotosYug Times PhotosYug Times PhotosAsian shares' relative valuations to global peers at 14-month low

Changes in MSCI Asia-Pacific Index estimates

Yug Times Photos

Yug Times PhotosYug Times PhotosYug Times PhotosAsian shares' relative valuations to global peers at 14-month low

The MSCI Asia-Pacific Index is up only 3.37 percent this year, while MSCI United States’ gains are up 19.7 percent this year and MSCI Europe’s 12.9 percent.

However, the Asia-Pacific index has gained 4.4 per cent over the past two weeks on hopes that the US Federal Reserve may delay the start of reducing its asset purchases and maintain its broad monetary policy for the near term. could.

“U.S. equities so far have had an incredibly nearly 35 percent premium over Asian equities, which is higher than the average discount over the past 20 years,” said Sean Taylor, APAC’s chief investment officer at DWS.

“We may see a reverse in trends next year as the rest of the world moves towards tighter monetary policy driven by strong recovery and inflationary pressures, while China increases fiscal spending with more liquidity provision.”

Read Also:  After Australia Arms Deal Flops, EU Launches Indo-Pacific Plan

Some analysts said Asian stocks are attractive at these levels and the recent uptick in vaccinations and rising domestic consumption levels in the region could turn around.

“Asian equities are owned by institutional investors. Within EM, investors are underweight from EM Asia and overweight by Latin American equities,” said Manishi Raychaudhuri, Asia-Pacific equity strategist at BNP Paribas.

“Given Asia’s strong growth outlook, the listed presence of tech and consumer megatrends, and low balance sheet risk, such a stance in Latin America is surprising to us,” he said.

The data shows that China, Hong Kong and South Korea have the lowest P/E ratios.

Read Also:  Fed's Powell Order Comprehensive Ethics Review After Officials Shout Out of Trading Signals

Valuation of Asia-Pacific Equities

Yug Times Photos

Yug Times PhotosYug Times PhotosYug Times PhotosAsian shares' relative valuations to global peers at 14-month low

Sector wise are the cheapest in the financial and real estate sector.

Meanwhile, Asian firms continued to receive earnings recovery in August, data showed, highlighting continued expectations of earnings recovery in the region.

Country-by-country analysis for changes in estimates over the last 30 days

Yug Times Photos

Asian shares' relative valuations to global peers at 14-month low

Sector-wise analysis for changes in estimates over the last 30 days

Yug Times Photos

Yug Times PhotosYug Times PhotosYug Times PhotosAsian shares' relative valuations to global peers at 14-month low

Reuters

.

This News Originally From – The Epoch Times

Asian shares' relative valuations to global peers at 14-month low
Nation World News Deskhttps://nationworldnews.com
Nation World News is the fastest emerging news website covering all the latest news, world’s top stories, science news entertainment sports cricket’s latest discoveries, new technology gadgets, politics news, and more.
Latest news
Related news
- Advertisement -

Leave a Reply