“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!