June Emerging Market Valuations

by | Jul 2, 2008 | Multi Currency Investing

Emerging Stock Market Value Analysis – June 2008.

41 of 52 stock markets around the world have dropped in 2008.

Emerging stock markets have suffered then most even worse than major markets.
Here is how they have performed.

India -37%
Turkey -34%
Philippines -33.9%
Pakistan -26.4%
China -25.6%
Slovenia -22%
Malaysia -17.3%
South Africa -16.8%
Hungary -14.5%

This is compared to a 10.2% drop in the US S&P 500.

Many of these markets were overheated and needed to revalue but in every sell off of this magnitude some extra good values are also created.

Emerging stock market values are the best long term indicator of where to invest in the emerging stock markets.

One way we keep track of emerging stock market values is to follow the analysis of our friend, Michael Keppler.

Michael continually researches emerging stock market valuations and compares their value based on current book to price, cash flow to price, earnings to price, average dividend yield, return on equity and cash flow return. He compares each emerging stock market’s history.

From this he develops his Good Value Emerging Stock Market Strategy. His analysis is rational, mathematical and does not worry about short ups and downs.

He is, in my opinion, one of the best market statisticians in the world and numerous very large fund managers use his analysis to manage funds.

In January, his company, Keppler Asset Management, was, for the third consecutive year, named Best Fund Company in the Fund Specialists’ category by Capital, a leading German business magazine. Keppler’s firm was one of only six out of 100 companies tested that received the highest five-star rating based on an independent evaluation of fund quality, management, and customer service by Feri Rating & Research and Steria Mummert Consulting.

Once a month we share Michael’s emerging stock market value analysis with you. Here is a summary of Keppler’s June 2008 current emerging stock market value comments on recent developments & outlook in emerging stock markets.

Recent Developments & Outlook

Of the three regional indices, Latin America performed best with a 9.4 % monthly gain; Europe, Middle East and Africa (EMEA) was up 7.8 %, while Asia declined 4.1 %. Year to date, Latin America is up 18.4 %, EMEA is up 1 %,
and Asia is down 10.9 %.

Thirteen markets advanced and twelve markets declined last month. The best three performers were Russia (+16.1 %), Argentina (+15.9 %) and Brazil (+11.5 %).

Pakistan fared worst among the decliners, losing 23.5 %. India was another market with a double digit decline (-10.1 %), and Egypt turned out to be the third worst performing market, losing 6.6 %.

Compared with their levels at the beginning of the year, fourteen markets were higher and eleven markets were lower. The biggest winners this year have been Morocco (+31.2 %), Argentina (+26.8 %) and Brazil (+22.1 %).

Turkey (-30.7 %), India (-27.1 %) and the Philippines (-25.7 %) performed worst so far this year.

There are no changes in Keppler’s performance ratings this month. The Top Value Model Portfolio contains the eight markets Hungary, Israel, Korea, Malaysia, Poland, Taiwan, Thailand and Turkey at equal weights.

SELL CANDIDATES (Low Value) China , Egypt , India , Indonesia , Morocco.

NEUTRALLY RATED MARKETS Argentina, Brazil, Chile, Colombia, Czech Republic, Israel, Jordan, , Mexico, Philippines, Pakistan, Peru, Russia, South Africa, Sri Lanka, Venezuela.

We’ll be looking for some good value shares in the worst hit markets during the month ahead.

According to Keppler, these markets offer the highest expectation of risk-adjusted returns.

For more details on Keppler’s analysis, contact Roderick Cameron at 1-212-245-4304 or email roderick.cameron@kamny.com
Until next message, may all you global investments be a good value.


In the last two months we have tripled our readerships there are many subscribers who are not familiar with Keppler and how to use this analysis. please send me your questions. Be sure to insert the letters “BL” in the subject line of emails you send so I can give your question priority.

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Join me with Thomas Fischer of Jyske Bank as we update global investments at our October 3-5 at our International Investing & Business Made EZ course in North Carolina