A rising [Asian]tide lifts all boats?t Is it the time 2 buy?
โพสต์แล้ว: ศุกร์ พ.ค. 04, 2007 1:24 pm
Thailand: The cheapest property in the best neighborhood?
Beau Thai XX begs the question whether buying Thai equities is the financial
equivalent of buying the cheapest property in the best neighborhood. Asia is a
major driver of global growth and seems likely to remain so for the foreseeable
future. This is being reflected in a significant re-rating of regional equities
everywhere that is, except Thailand. This implies long-term sustained lower
growth rates between Thailand and the rest of Asia. We believe this will prove to
be false and we expect valuations to converge as political risks reduce later this
year. Maintain SET targets of 780 (YE 07) and 1,000 (YE 08).
Mind the valuation gap
The PER for MSCI Asia ex Japan is 15.8x compared to 11.6x two years ago. The
Asia PER relative to the rest of the world has risen from 0.71x to 0.91x over this
period. Since 2004 equity market capitalization as a proportion of GDP has risen
for every Asian country but one Thailand. Thailands forward PER is 35% below
the average for Asia, and 38% below the average for the rest of the ASEAN-4!
A rising [Asian] tide lifts all boats
Increasing trade and capital flows between Asian countries are creating an
informal economic block. If the thesis of a de-coupling between Asia
and other key economic regions is correct, intra-Asian trade and investment
should sustain growth even if the US slows. This should benefit all Asian
countries. Or, put another way, a rising [Asian] tide lifts all boats.
Beau Thai XX begs the question whether buying Thai equities is the financial
equivalent of buying the cheapest property in the best neighborhood. Asia is a
major driver of global growth and seems likely to remain so for the foreseeable
future. This is being reflected in a significant re-rating of regional equities
everywhere that is, except Thailand. This implies long-term sustained lower
growth rates between Thailand and the rest of Asia. We believe this will prove to
be false and we expect valuations to converge as political risks reduce later this
year. Maintain SET targets of 780 (YE 07) and 1,000 (YE 08).
Mind the valuation gap
The PER for MSCI Asia ex Japan is 15.8x compared to 11.6x two years ago. The
Asia PER relative to the rest of the world has risen from 0.71x to 0.91x over this
period. Since 2004 equity market capitalization as a proportion of GDP has risen
for every Asian country but one Thailand. Thailands forward PER is 35% below
the average for Asia, and 38% below the average for the rest of the ASEAN-4!
A rising [Asian] tide lifts all boats
Increasing trade and capital flows between Asian countries are creating an
informal economic block. If the thesis of a de-coupling between Asia
and other key economic regions is correct, intra-Asian trade and investment
should sustain growth even if the US slows. This should benefit all Asian
countries. Or, put another way, a rising [Asian] tide lifts all boats.
