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Sensex has highest P/E among emerging peers(The Economic Times (India) Via Thomson Dialog NewsEdge)With the market scaling new highs, valuations seem to be getting stretched. Going by the price-earnings ratio, the sensex has the highest P/E among the emerging market peers. The sensex is currently ruling at about 20.2 times, while most other markets are ruling at lower multiples. While Hong Kong's index Hang Seng is ruling at 13.1 times, Singapore's Strait Times is at 14.3 times, while Mexico has a P/E of 12.1. Some global indices like Dow Jones, S&P 500, Nasdaq and Nikkei enjoy higher P/E than its emerging market peers. Nikkei is currently ruling at 44.7 times, Dow Jones at 21.5, Nasdaq at 35.8. Prices of most of the frontline companies have risen quite substantially, over the past couple of months, especially those in sectors like auto, cement, construction and capital goods. Considering the growth in economy and robust corporate earnings growth, one cannot say that valuations are stretched. Now we are seeing a P/E re-rating for Indian market, says a fund manager with a leading domestic asset management company (AMC). Indian markets have outperformed most of the other emerging markets during current year. While the sensex gained 16% since January this year, Singapore rose 6%, Thailand gained 2.3%, Taiwan rose 1%, while Korea was down 3%, making India the best performer during the year. Emerging markets have seen strong fund flows over the past two months. While emerging markets have received over $20bn during the year, India alone has received $3.5bn (Rs 15,759 crore). So far in March, FIIs have put in $1bn. |