Reuters: Hot Stocks: STOCKS NEWS ASEAN-Valuations show Philippines, Indonesia expensive

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STOCKS NEWS ASEAN-Valuations show Philippines, Indonesia expensive Jul 12th 2012, 09:30 Thu Jul 12, 2012 5:30am EDT A rally in Southeast Asian stocks this year, fuelled by funds seeking growth opportunities in the emerging markets, has swelled valuations of shares to levels far above their average over the last decade, with the Philippines and Indonesian stocks leading the pack. The MSCI index of the Philippines trades at 16.12 times the 12-month forward earnings, a 19.34 percent premium to its 10-year average forward valuations while MSCI Indonesia trades at 12.53 times expected earnings, a 14.94 percent premium, according to Thomson Reuters I/B/E/S. Thailand's MSCI index currently trades at 10.5 times forward earnings, a 3 percent premium, while the MSCI Malaysian index trades at 13.95 times forward earnings, a 0.4 percent premium. Bucking the trend, MSCI Singapore trades at a relatively cheaper level of 12.7 times forward earnings, a 9.1 percent discount. "ASEAN will remain an "expensive winner" in the second half of 2012. What has worked so far has been "expensive growth", with the top 10 sectors in terms of risk-adjusted return over the last one year all from ASEAN," JP Morgan said in a strategy note dated July 9. "EPS growth momentum continues to be the key differentiator, and by this measure Thailand and the Philippines should continue to outperform, with 3-month EPS momentum at the highest levels in the Asian universe for both FY12 and FY13," the broker said. 1600 (0900 GMT) (Reporting by Viparat Jantraprap in Bangkok and Vikram Subhedar in Hong Kong) viparat.jantraprapaweth@thomsonreuters.com) Link this Share this Digg this Email Reprints

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