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Indian Equity Market Remains The Most Expensive Among the EM World

INDIA
  • Indian equities sold off aggressively following the RBI announcement on Wednesday (40bps hike in the repo rate), with the NIFTY index falling by 2.2%, registering its biggest correction since February (Ukraine invasion shock).
  • Even though the NIFTY index is trading 10% below its all-time high reached in October 2021, India remains the most expensive equity market among the EM world according to a range of ‘value’ metrics.
  • In this chart, we compute the z-score of P/B ratios of the 16 EM equity markets (15 countries + MSCI Emerging Market index) using over 10 years of data (starting January 2010) and then rank them from 'cheapest' to 'most expensive' based on the distance between the minimum value and the current z-score.
  • We can notice that India is the most 'expensive' market using a PB z-score approach, with a current price to book of 3.80 (1.60 for EM equities – MSCI index).

Source: Bloomberg/MNI

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  • Indian equities sold off aggressively following the RBI announcement on Wednesday (40bps hike in the repo rate), with the NIFTY index falling by 2.2%, registering its biggest correction since February (Ukraine invasion shock).
  • Even though the NIFTY index is trading 10% below its all-time high reached in October 2021, India remains the most expensive equity market among the EM world according to a range of ‘value’ metrics.
  • In this chart, we compute the z-score of P/B ratios of the 16 EM equity markets (15 countries + MSCI Emerging Market index) using over 10 years of data (starting January 2010) and then rank them from 'cheapest' to 'most expensive' based on the distance between the minimum value and the current z-score.
  • We can notice that India is the most 'expensive' market using a PB z-score approach, with a current price to book of 3.80 (1.60 for EM equities – MSCI index).

Source: Bloomberg/MNI