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of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
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Free AccessFinding Value in EM Markets: South Korea, Chile and Poland Are The 'Cheapest' Equities
- In this chart, we rank the 16 EM equity markets (15 countries + EM index - MXEF Index) from 'cheapest' to the most 'expensive' ones based on the Price-to-Book, Price-to-Sales and Price-to-Earnings ratios.
- To compute the score of each EM equity markets, we simply add the rank each time; hence, the lowest score that a EM country can have is 3 (the cheapest) and the highest score is 48 (most expensive).
- As expected, Turkish equities still appear the cheapest according to our scoring model (value score of 4) as TRY weakness due to dovish CBRT and political uncertainty has been weighing on Turkish risky assets. TRY has been the weakest EM FX performer in 2021, down 21% against the US Dollar. With CBRT cutting rates, TRY could continue to depreciate in the near to medium term, therefore weighing on Turkish equities.
- South Korea is also 'cheap' relative to other EM equity markets even though Korea equities were trading at an all-time high this summer. KOSPI is down nearly 10% from its all-time high reached in early July.
- Poland equities also appear 'cheap' despite the strong recovery since March 2020 (WIG20 Index is up 90% since then).
- On the other hand, Czech equities, which are currently trading at a 13-year high, mostly driven by 'hawkish' CNB and global liquidity, appear 'expensive' according to our scoring model.
- Indian equities remain the most expensive market, with current price-to-book and PE ratios of 3.87 and 28.12, respectively (vs. 1.93 and 14.60 for the EM MSCI index).
Source: Bloomberg/MNI
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Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.