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Asia-Pacific Stocks are Undervalued and Undrowned

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The price valuations of Asia-Pacific stocks compared with their global peers are at 14-month lows after their soft performance due to concerns over slowing growth and the spread of the Delta-variant of coronavirus this yr”— Paul Ebeling

According to Refinitiv data, the MSCI Asia-Pacific index’s forward 12-month P/E ratio stood at 14.9 compared with the MSCI World’s P/E ratio of 18.46. That near 20% valuation discount is the highest in 14-months, the data showed.

The MSCI Asia-Pacific index is up just 3.37% this yr, compared with the MSCI United States’ gain of 19.7% and MSCI Europe’s 12.9% this yr.

However, the Asia-Pacific index has gained 4.4% in the past 2 wks, on expectation that the Fed will delay the start of tapering its asset purchases and maintain its dovish monetary policy into Q-1 of Y 2023.

China, Hong Kong and SKorea have the lowest P/E ratios the data showed.

Sectorwise, financials and real estate are the cheapest in the region.

Meanwhile, Asia-Pacific firms continued to receive earnings upgrades in August, thus highlighting sustained expectations of an earnings recovery in the region.

Our work shows that Asia-Pacific stocks are attractive at these marks and will see a Key reversal on a rise in domestic consumption in the region.

Have a prosperous day, Keep the Faith!

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Paul A. Ebeling, a polymath, excels, in diverse fields of knowledge Including Pattern Recognition Analysis in Equities, Commodities and Foreign Exchange, and he is the author of "The Red Roadmaster's Technical Report on the US Major Market Indices, a highly regarded, weekly financial market commentary. He is a philosopher, issuing insights on a wide range of subjects to over a million cohorts. An international audience of opinion makers, business leaders, and global organizations recognize Ebeling as an expert.