EWM: Malaysian Equities Are Firmly Overvalued

Nov. 28, 2022 2:29 AM ETiShares MSCI Malaysia ETF (EWM)
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Summary

  • EWM invests in Malaysian equities.
  • While markets tend to lead the real economy, and the regional economy may be bottoming cyclically, I do not think EWM is priced for a bounce-back.
  • That is because the fund still seems overvalued, even if we are more optimistic than consensus analyst estimates for forward, long-term earnings growth.
  • I would take a neutral stance on EWM at present.

Kuala Lumpur Urban Scene, Malaysia

zorazhuang

iShares MSCI Malaysia ETF (NYSEARCA:EWM) is an exchange-traded fund that provides investors with direct exposure to Malaysian equities. The fund had assets under management of $245 million as of November 25, 2022, with an expense ratio of 0.50%, making the fund relatively

EWM Optimistic Case

Author's Calculations

Pessimistic IRR Estimate for EWM

Author's Calculations

Chinese Business Cycle Positioning as of Q4 2022

Fidelity.com

EWM Sector Exposures

Morningstar.com

This article was written by

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Providing commentary and analysis, principally focused on global macro, foreign exchange, and equities as an asset class. Primary interests include equity investing from an international perspective, and FX fair values.

Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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