Asian price-to-book ratios looks compelling – BlackRock

Added 13th April 2016

The price-to-book ratio of companies in Asia excluding Japan and the region’s 40-year market history are combining to indicate now is the right time to invest there, according to BlackRock’s Andrew Swan.

Asian price-to-book ratios looks compelling – BlackRock

Whenever Asia ex Japan markets trade between 0.9 and 1.4 times price-to-book, investors have subsequently benefited from strong markets for 80-90% of the following 12 or 36 months according to Swan, head of Asian Equities and manager of the BlackRock Asia Fund and BlackRock Asia Special Situations Fund.

This trend goes back 40 years, and as Asia ex Japan are currently trading around 1.2 times price-to-book, now is a compelling time to invest as the markets are starting to recover from January’s lows, said Swan.

Moreover, the recent weakening of the dollar gives Asia space to implement the right mix of monetary and fiscal policy to bolster growth, noted the portfolio manager. BlackRock still sees value in China, mainly in growth companies within the e-commerce space, value stocks and energy companies post the recent fall in the oil price.

In India, where the asset manager believes fears are overplayed, it likes autos and telecoms. The firm is also positive on the Indonesian market, “where growth resilience and a renewed commitment to reform can help extend its recent recovery,” in Swan’s view.

BlackRock’s risk team has found that quality stocks are at 15-year valuation highs, while the reverse is true for value stocks. Korea and Malaysia still have a number of structural issues to resolve, highlighting that selectivity is crucial both at a stock and country level, Swan noted.

Overall, BlackRock expects growth in the region to pick up over the next six months. “With valuations where they are, we expect to see further upside,” Swan said.

Kames Income Hub


Vincent McEntegart, manager of the Kames Diversified Monthly Income Fund, explains how he aims to deliver a stable and sustainable income of 5% p.a.*, paid monthly, by investing in a range of asset classes

Square Mile Research

Lazard Emerging Markets
Lazard Emerging Markets

Talking Factsheets is a video service for users...

Visitor's Comments Add your comment

Add Your Comment

We won't publish your address



Investment Strategy




PA Channel Island 2016
PA Channel Island 2016

8th November 2016
The Royal Yacht, Jersey


17th November 2016
The Andaz

PA Emerging Markets 2016
PA Emerging Markets 2016

1st December 2016
The Mayfair, London

Sponsored Content

Investment Strategy