Saturday, May 17, 2008

Singapore, Taiwan, Korea and Sweden MSCI Index comparisions

Once again I do a review of the valuation of various MSCI country Indices that interest me. My last similar article is here. All data is as of today (May 17 2008).

MSCI Korea: 10Yr annualized returns: 23.40%, P/E=17.23, P/B=2.62, Samsung=16% of Index.
MSCI Taiwan: 10Yr annualized returns: 2.09%, P/E=17.49,/ P/B=2.67, Taiwan Semiconductor =11.6% of index.
MSCI Singapore: 10Yr annualized returns: 11.05%, P/E=14.71, P/B=2.72, Financials=51.48% of index.
MSCI Sweden: 10Yr annualized returns: 11.05%, P/E=13.73, P/B=3.55, Ericcson=11.93%, Financials=23% of index.

Based on a simplistic analysis of the above I had bought Korea which then had the lowest P/E. Now that I am reviewing the valuation I see no need to change my holdings in Korea. Singapore looks cheap, but with Financials being a major part of the Index I am not sure if now is the right time to buy more.

Why look at Sweden? I just recalled from memory a chart from Jeremy Seigels "Stocks for the long run" which shows Sweden has the best long term return from equities; just slightly better than the US.

Disclaimer: I already own the Lyxor Korea ETF .
I am not sure if the numbers above include reinvested dividends. The P/E also seems to be different from other estimates I have seen, possibly because they may be using only annual figures and not TTM and also because the more bullish analysts usually mention forward P/E instead of trailing P/E.