Thailand is the top Asian Cub market gainer over the past week
Analysts are expecting Sri Lanka's earnings to grow by 28% per year and the Philippines' Tech sector's earnings to grow by 152% per year, over the next five years.
Asian Cubs
The Asian Cubs are 10 fast growing markets with a combined 846 million population of mostly young (under 30 years of age), educated, urbanized, and gentrified people (third highest in the world); digitized with 1.1 billion mobile phones (third most in the world); and, US$3.8 trillion of GDP (seventh wealthiest in the world).
McKinsey & Company calls these markets “the biggest growth opportunity in the history of capitalism.”
Summary
The Thailand stock market is up 1.3% over the past week and is the top Asian Cub market gainer.
Analysts are most optimistic about the future earnings growth of Sri Lanka (28% per year) and the Philippines (20% per year).
Analysts are most optimistic on the Philippine Tech sector, expecting future earnings growth of 152% per year, over the next 5 years.
Read more below.
Performance and valuation
👉 In the short term, investor sentiment and emotion drive shareholder returns. Over the long term, revenue, earnings, and free cash flow growth drive shareholder returns.
(Ranked from highest total market value.)
1. 🇲🇨 Indonesia: -0.4%
Over the past week, the market has stayed flat, however the Utilities sector stood out, gaining 10%. More promisingly, the market is up 14% over the past year. Earnings are forecast to grow by 10% annually.
Companies: 723
Total market value: Rp9,148.2 trillion (US$616 billion)
1-year growth: +27%
3-year growth: -85%
Total revenue: Rp4,223.3 trillion (US$284 billion)
1-year growth: +28%
3-year gowth: +18%
Total earnings: Rp540.6 trillion (US$36 billion)
1-year growth: +87%
3-year growth: +58%
Market valuation (PE*): 16.9x
Trading below the 3-year average PE* of 69.4x.
Investors and analysts are pessimistic, indicating they expect that future earnings (10% per year) will not grow as fast as they have historically (16% per year).
The market is undervalued (inexpensive).
Highest growing sector: Tech
Analysts expect future earnings growth of 73% per year, over the next 5 years.
2. 🇨🇷 Thailand: +1.3%
The market is up 1.3% over the past week, with the Energy sector leading the way, up 4.1%. As for the past 12 months, the market is up 3.9%. Earnings are forecast to grow by 18% annually.
Companies: 822
Total market value: ฿20.0 trillion (US$552 billion)
1-year growth: +9%
3-year growth: +21%
Total revenue: ฿15.7 trillion (US$434 billion)
1-year growth: +36%
3-year growth: +29%
Total earnings: ฿1.1 trillion (US$30 billion)
1-year growth: +21%
3-year growth: +23%
Market valuation (PE*): 18.8x
Trading below the 3-year average PE* of 21.1x.
Investors are pessimistic, indicating they expect that future earnings (18% per year) will not grow as fast as they have historically (7.1% per year).
Analysts, however, are optimistic that future earnings (18% per year) will grow faster than historical growth rates (7.1% per year).
The market is undervalued (inexpensive).
Highest growing sector: Industrials
Analysts expect future earnings growth of 55% per year, over the next 5 years.
3. 🇸🇬 Singapore: -0.08%
The Energy sector gained 10% while the market remained flat over the past week. In line with that, the market has also been flat over the past year. As for the next few years, earnings are expected to grow by 12% per year.
Companies: 558
Total market value: S$715.3 billion (US$513 billion)
1-year growth: +5%
3-year growth: +9%
Total revenue: S$558.5 billion (US$401 billion)
1-year growth: +16%
3-year growth: +15%
Total earnings: S$54.6 billion (US$39.2 billion)
1-year growth: +128%
3-year growth: +19%
Market valuation (PE*): 13.1x
Trading below the 3-year average PE* of 26.1x.
Investors are pessimistic, indicating they expect that future earnings (12% per year) will not grow as fast as they have historically (5.9% per year).
Analysts, however, are optimistic that future earnings (12% per year) will grow faster than historical growth rates (5.9% per year).
The market is undervalued (inexpensive).
Highest growing sector: Industrials
Analysts expect future earnings growth of 26% per year, over the next 5 years.
4. 🇲🇾 Malaysia: -0.3%
The market has been flat over the past week. The past year hasn't been profitable, with the market dropping 7.6%. As for the next few years, earnings are expected to grow by 9.9% per year.
Companies: 941
Total market value: RM1.7 trillion (US$381 billion)
1-year growth: -7%
3-year growth: +1%
Total revenue: RM1.1 trillion (US$246 billion)
1-year growth: +13%
3-year growth: +12%
Total earnings: RM134.0 billion (US$30 billion)
1-year growth: +41%
3-year growth: +88%
Market valuation (PE*): 12.4x
Trading below the 3-year average PE* of 22.6x.
Investors and analysts are pessimistic, indicating they expect that future earnings (9.9% per year) will not grow as fast as they have historically (23% per year).
The market is undervalued (inexpensive).
Highest growing sector: Consumer Discretionary
Analysts expect future earnings growth of 31% per year, over the next 5 years.
5. 🇵🇭 Philippines: -1.6%
Over the past 7 days, the market has dropped 1.6%, driven by a decline of 2.0% in the Industrials sector. Overall, the market has been flat over the past year. Earnings are forecast to grow by 20% annually.
Companies: 255
Total market value: ₱13.3 trillion (US$237 billion)
1-year growth: +2%
3-year growth: -5%
Total revenue: ₱10.7 trillion (US$190 billion)
1-year growth: +33%
3-year growth: +15%
Total earnings: ₱960.2 billion (US$17.1 billion)
1-year growth: +56%
3-year Growth: +20%
Market valuation (PE*): 13.9x
Trading below the 3-year average PE* of 20.3x.
Investors are pessimistic, indicating they expect that future earnings (20% per year) will not grow as fast as they have historically (6.2% per year).
Analysts, however, are optimistic that earnings will grow faster (20% per year) than historical growth rates (6.2% per year).
The market is undervalued (inexpensive).
Highest growing sector: Tech
Analysts expect future earnings growth of 152% per year, over the next 5 years.
6. 🇻🇳 Vietnam: +1.0%
The market is up 1.0% over the past week, with the Financials sector leading the way, up 1.1%. In contrast, the market has seen a decline of 5.3% over the past 12 months. Looking forward, earnings are forecast to grow by 19% annually.
Companies: 752
Total market value: ₫5,433.5 trillion (US$232 billion)
1-year growth: +1%
3-year growth: +57%
Total revenue: ₫2,537.9 trillion (US$108 billion)
1-year growth: +5%
3-year growth: +17%
Total earnings: ₫348.7 trillion (US$15 billion)
1-year growth: +11%
3-year growth: +70%
Market valuation (PE*): 15.6x
Trading close to the 3-year average PE* of 16.5x.
Investor sentiment and analysts are neutral, indicating they expect that future earnings (19% per year) will grow in line with historical growth rates (19% per year).
The market is fairly valued.
Highest growing sector: Industrials
Analysts expect future earnings growth of 34% per year, over the next 5 years.
7. 🇧🇩 Bangladesh: +1.1%
The market has climbed by 1.1% over the past week, with every sector up and the Healthcare sector leading the way. Longer term, the market is actually down 11% over the past year. Looking forward, earnings are forecast to grow by 12% annually.
Companies: 336
Total market value: ৳4.4 trillion (US$46 billion)
1-year growth: -10%
3-year growth: +39%
Total revenue: ৳2.4 trillion (US$25 billion)
1-year growth: +19%
3-year growth: +34%
Total earnings: ৳271.0 billion (US$2.8 billion)
1-year growth: +21%
3-year growth: +22%
Market valuation (PE*): 16.4x
Trading close to the 3-year average PE* of 17.7x.
Investor sentiment is neutral, indicating they expect that future earnings (12% per year) will grow in line with historical growth rates (6.8% per year).
Analysts, however, are optimistic that future earnings (12% per year) will grow faster than historical growth rates (6.8% per year).
The market is fairly valued.
Highest growing sector: Consumer Discretionary
Analysts expect future earnings growth of 38% per year, over the next 5 years.
8. 🇱🇰 Sri Lanka: -3.7%
Over the past 7 days, the market has dropped 3.7%, driven by a pullback of 6.4% in the Financials sector. The market has dropped 6.8% over the past year. Looking forward, earnings are forecast to grow by 28% annually.
Companies: 265
Total market value: LKRs3.8 trillion (US$11 billion)
1-year growth: -4%
3-year growth: +53%
Total revenue: LKRs6.0 trillion (US$17 billion)
1-year growth: +54%
3-year growth: +79%
Total earnings: LKRs715.9 billion (US$2 billion)
1-year growth: +103%
3-year growth: +186%
Market valuation (PE*): 5.3x
Trading below the 3-year average PE* of 11x.
Investors and analysts are pessimistic, indicating they expect that future earnings (28% per year) will not grow as fast as they have historically (42% per year).
The market is undervalued (inexpensive).
Highest growing sector: Telecom
Analysts expect future earnings growth of 105% per year, over the next 5 years.
Asian Frontier Cubs
9. 🇰🇭 Cambodia: -0.3%
Companies: 9
Total market value: KHR7,152.7 billion (US$1.7 billion)
1-year growth: -9%
3-year growth: +202%
10. 🇲🇲 Myanmar: -1.9%
Companies: 7
Total market value: MMK526.4 billion (US$249 million)
1-year growth: -25%
3-year growth: -20%
* The PE, or Price to Earnings Ratio, determines investor sentiment and perceived value for a market. It measures and compares values among mature and profitable companies, across markets, and across time. A higher than average PE indicates increased investor optimism, resulting in an overvalued (expensive) market. A lower than average PE indicates increased investor pessimism, resulting in an undervalued (inexpensive) market.
👉 Long term investors who focus on value investing (buying high quality businesses at below average prices) will find more opportunities in undervalued (inexpensive) markets.
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The content is excerpted, edited, and sourced from analysts’ consensus and S&P Global Market Intelligence.
The content is for informational purposes only and is neither an offer to buy or sell securities nor investment advice. Forward-looking statements may be uncertain and historical returns may not predict future performance. The International Investor is not a registered broker-dealer, investment adviser, or fiduciary.