Global Stock Markets: Valuations Improving

A study of the dividend yields and price-earnings multiples of a list of 100 global stock markets makes for interesting reading.

With the sharp decline in stock markets over the past few months, valuation levels have obviously improved markedly. This is illustrated by the fact that 62% of the indices are now trading at P/Es of less than 10, compared with a figure of 39% a mere one month ago.

The following graph, courtesy of US Global Investors, illustrates the P/E compression that has taken place in developed and emerging markets respectively since 1999/2000.

click to enlarge

Value is undoubtedly starting to return to some stock markets, even if one factors in that the valuation metrics are based on historical figures and need to be adjusted for reduced earnings and dividend cuts. Needless to say, many of the markets have made it to the top (i.e. “cheap”) end of the rankings on the back of pretty dismal circumstances.

Although the valuation tables do not represent a shopping list, they are a handy screening tool to trigger further research.

Click here (pdf file) for the global index valuation tables. (Source: Fullermoney (based on data from Bloomberg), November 6, 2008.)

Comments

[bobbobwhite:]

This is a real "so what" article. Nothing of helpful substance.

2008 Nov 10 11:51 AM

[OldLimey:]

The shallowest post I´ve read from a contributor who usually does very much better. BTW, can´t see the interest in trailing PEs and historic dividend yields in an environment where both earnings and dividends are seriously open to doubt going forward.

2008 Nov 10 03:02 PM

[Kunst:]

Tough crowd!

2008 Nov 11 02:30 AM