Valuing Asian markets

This week’s MoneyWeek Asia is on the price/book value for the MSCI Asia ex Japan.

Price/book has historically worked very well as a top-down valuation measure in Asia ex Japan because markets are cyclical. A low market price/book usually gives good returns very quickly, while a very high one has usually meant a bubble will be bursting soon.

Right now, we’re on a price/book of about 1.6. That’s not an outstanding buying opportunity, but it suggests the odds are in our favour. More details, including charts of returns vs valuations, in the article.

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