The Philippines is the Asian tiger cubs' top gainer this week
Analysts are most optimistic about the Philippines' future earnings growth; Indonesia's market is the most undervalued; and Bandung, Indonesia's restaurants and bars are the least expensive.
Asian tiger cubs market performance
From July 2 to 8, 2022
In brief:
The Philippine stock market is the top gainer this week.
Investors are least pessimistic about Thailand’s future earnings growth, and most pessimistic about Indonesia.
Analysts are most optimistic about the Philippine’s future earnings growth, and least optimistic about Malaysia.
The Thai market is fairly valued, Indonesia is the most undervalued, and Vietnam is the least undervalued.
Bandung, Indonesia’s restaurants and bars are the least expensive.
Read more below.
Performance and valuation
Ranked according to total market value.
🇲🇨 Indonesian market: -0.5%
Over the last 7 days, the market has remained flat, although notably the Consumer Discretionary sector declined by 5.3%. As for the longer term, the market has risen 9.3% in the past 12 months. As for the next few years, earnings are expected to grow by 11% per annum.
Companies: 702
Total market value: Rp8,657.2 trillion (US$580 billion)
3-year growth: -85%
Total revenue: Rp4,076.1 trillion (US$270 billion)
3-year growth: +14%
Total earnings: Rp525.5 trillion (US$35 billion)
3-year growth: +54%
Market valuation (PE*): 16.5x
Below the 3-year average PE* of 74.7x
Investors and analysts are pessimistic, indicating that they expect that earnings will not grow as fast as they have historically.
Market is undervalued (inexpensive).
🇨🇷 Thai market: -1.0%
In the last week, the market has stayed flat, however the Healthcare sector stood out, gaining 5.0%. Similarly, the market is flat for the past 12 months. As for the next few years, earnings are expected to grow by 18% per annum.
Companies: 819
Total market value: ฿18.7 trillion (US$520 billion)
3-year growth: +10%
Total revenue: ฿14.2 trillion (US$400 billion)
3-year growth: +17%
Total earnings: ฿976.9 billion (US$27 billion)
3-year growth: +13%
Market valuation (PE*): 19.1x
Below the 3-year average PE* of 21.2x
Investor sentiment is neutral, indicating that they expect earnings will grow in line with historical growth rates.
Analysts, however, are optimistic that earnings will grow faster than historical growth rates.
Market is fairly valued.
🇸🇬 Singaporean market: +0.7%
The Communication Services sector gained 3.6% while the market remained flat over the last week. Unfortunately though, the market is down 3.4% over the past year. Looking forward, earnings are forecast to grow by 13% annually.
Companies: 557
Total market value: S$691.5 billion (US$494 billion)
3-year growth: +1%
Total revenue: S$533.6 billion (US$381 billion)
3-year growth: +10%
Total earnings: S$47.6 billion (US$34 billion)
3-year growth: +4%
Market valuation (PE*): 14.5x
Below the 3-year average PE* of 26.3x
Investors are pessimistic, indicating that they anticipate that earnings will not grow as fast as they have historically.
Analysts, however, are optimistic that earnings will grow faster than historical growth rates.
Market is undervalued (inexpensive).
🇲🇾 Malaysian market: -1.7%
Over the last 7 days, the market has dropped 1.7%, driven by a loss of 6.1% in the Materials sector. In the last 12 months the market is down 8.2%. As for the next few years, earnings are expected to grow by 10% per annum.
Companies: 935
Total market value: RM1.6 trillion (US$360 billion)
3-year growth: -7%
Total revenue: RM1.1 trillion (US$250 billion)
3-year growth: +9%
Total earnings: RM100.9 billion (US$23 billion)
3-year growth: +41%
Market valuation (PE*): 15.7x
Below the 3-year average PE* of 22.9x
Investors and analysts are pessimistic, indicating that they anticipate that earnings will not grow as fast as they have historically.
Market is undervalued (inexpensive).
🇵🇭 Philippine market: +2.1%
Over the last 7 days, the market has risen 2.1%, driven by gains of 3.6% in the Industrials sector. Over the past year the market is down 6.8%. As for the next few years, earnings are expected to grow by 21% per annum.
Companies: 253
Total market value: ₱12.6 trillion (US$230 billion)
3-year growth: -12%
Total revenue: ₱9.6 trillion (US$170 billion)
3-year growth: +4%
Total earnings: ₱844.7 billion (US$15 billion)
3-year growth: +6%
Market valuation (PE*): 15x
Below the 3-year average PE* of 20.5x
Investors are pessimistic, indicating that they anticipate that earnings will not grow as fast as they have historically.
Analysts, however, are optimistic that earnings will grow faster than historical growth rates.
Market is undervalued (inexpensive).
🇻🇳 Vietnamese market: -2.3%
Over the last 7 days, the market has dropped 2.3%, driven by a decline of 11% in the Utilities sector. The market has dropped 13% in the last year. Looking forward, earnings are forecast to grow by 20% annually.
Companies: 749
Total market value: ₫4,924.8 trillion (US$210 billion)
3-year growth: +42%
Total revenue: ₫2,473.4 trillion (US$110 billion)
3-year growth: +14%
Total earnings: ₫345 trillion (US$15 billion)
3-year growth: +68%
Market valuation (PE*): 14.3x
Above the 3-year average PE* of 16.6x
Investors are pessimistic, indicating that they anticipate that earnings will not grow as fast as they have historically.
Analysts, however, are optimistic that earnings will grow faster than historical growth rates.
Market is undervalued (inexpensive).
* 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, but an overvalued (expensive) market. A lower than average PE indicates increased investor pessimism, but an undervalued (inexpensive) market.
👉 Long term investors who focus on value investing (buying good businesses at below average prices) will find more opportunities in undervalued (inexpensive) markets.
Restaurant and bar price index
The restaurant and bar price index is a comparison of the prices of meals and drinks in restaurants and bars, compared to New York City. If a city has, for example, an index of 120, it means that meals and drinks in that city are 20% more expensive than in New York. If a city has an index of 80, that means that meals and drinks in that city are 20% less expensive than in New York.
Ranked from least expensive to most expensive (June 2022):
Bandung, Indonesia: 15.21(84.79% less expensive than New York)
Surabaya, Indonesia: 15.68
Chiang Mai, Thailand: 15.78
Hanoi, Vietnam: 18.43
Penang, Malaysia: 18.76
Jakarta, Indonesia: 19.70
Ho Chi Mihn City, Vietnam: 20.11
Cebu, Philippines: 20.15
Bali, Indonesia: 20.92
Pattaya, Thailand: 21.22
Bangkok, Thailand: 22.13
Phnom Penh, Cambodia: 22.56
Quezon City, Philippines: 22.75
Petaling Jaya, Malaysia: 23.05
Manila, Philippines: 23.90
Kuala Lumpur, Malaysia: 24.12
Phuket, Thailand: 25.18
Makati, Philippines: 25.25
Singapore, Singapore: 52.20 (47.8% less expensive than New York)
👉 Long term investors who focus on life value investing (spending on good food and drinks at the lowest prices) will find more opportunities in the undervalued (inexpensive) markets of Southeast Asia.
The best way to protect ourselves from economic and geopolitical uncertainty is to invest in good, cash generating businesses over the long term, that deliver real value to the economies that they serve.
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This post is excerpted, edited, and sourced from analyst notes, Numbeo, and S&P Global Market Intelligence. The content is for general informational and entertainment purposes only and should not be construed as investment advice.