InvestorQ : Do you see FPIs coming back to invest in Asia and India? Have the valuations become more attractive now?
Dawn Cherian made post

Do you see FPIs coming back to invest in Asia and India? Have the valuations become more attractive now?

Answer
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Dilmini Mercia answered.
5 months ago


The primary question you need to ask is whether Asian valuations have really become attractive or not? One outcome of the COVID-19 has been that Asian valuations have dropped to a 15-month low. MSCI Asia Pacific index saw its P/E ratio fall to 11.79 as of Mar-20 compared to 14.19 as of Dec-19. This is also lower than the 13.39, which is the average P/E of the MSCI World Index. Countries like Indonesia, India, Vietnam and Philippines saw massive compression in valuation. As of Mar-20, the P/E ratio of South Korea was the cheapest at 8.89 followed by China at 8.94 and Vietnam at 9.06. However, any immediate shift back to Asia looks unlikely. The current market strategy continues to be risk-off, which means emerging markets will be off the radar.