Prophetable?
JP Morgan had a line on it. UBS/Bell Potter had a line on it (http://guambatstew.blogspot.com/2005/09/channeling-spi.html). Now Goldman Sachs is joining the choir:
"Goldman Sachs JBWere's chief investment officer, retail, Mike Hawkins, has been alerting the firm's clients to a curious (sic) fact: shares in Australian companies are being valued more highly across the board than their international equivalents.
"Local consumer stocks, including retailers and media companies, industrial companies, oil and gas companies, miners, telecommunications companies, utilities, health care companies and financial services groups, are all being valued more highly than their international equivalents. And in some cases, the premium is quite big. Australian energy companies - oil and gas groups, basically, are changing hands on an average price-to-forecast calendar 2006 earnings multiple of 17.5 times, 50 per cent higher than international equivalents in the MSCI global index.
"Industrial shares are valued at 19.3 times forecast earnings, 31 per cent above equivalent shares in MSCI's international basket.
Hawkins has told Goldman Sachs JBWere's clients that he thinks the local sharemarket's move en masse into the dress circle is unprecedented, and probably unsustainable.
"China notwithstanding, it would surprise if the Australian market continued to be priced at a premium to the rest of the world and, for big funds that are able to invest anywhere, Hawkins's analysis suggests that a switch towards overseas markets is in order.
"Most private investors here will continue to decide between investment options in the local market, however - and for them the question posed by Hawkins's analysis is: will the historical norm be reasserted by a retreat here, or a rise overseas? If it is the former, now is the time to consider shifting some money out of local shares and into alternatives. If it's the latter, shares and the relatively attractive income they are generating by way of dividends should still be a good place to be...."
This and more at: http://www.smh.com.au/news/business/australia-races-ahead-of-the-pack/2005/10/02/1128191605185.html#
"Goldman Sachs JBWere's chief investment officer, retail, Mike Hawkins, has been alerting the firm's clients to a curious (sic) fact: shares in Australian companies are being valued more highly across the board than their international equivalents.
"Local consumer stocks, including retailers and media companies, industrial companies, oil and gas companies, miners, telecommunications companies, utilities, health care companies and financial services groups, are all being valued more highly than their international equivalents. And in some cases, the premium is quite big. Australian energy companies - oil and gas groups, basically, are changing hands on an average price-to-forecast calendar 2006 earnings multiple of 17.5 times, 50 per cent higher than international equivalents in the MSCI global index.
"Industrial shares are valued at 19.3 times forecast earnings, 31 per cent above equivalent shares in MSCI's international basket.
Hawkins has told Goldman Sachs JBWere's clients that he thinks the local sharemarket's move en masse into the dress circle is unprecedented, and probably unsustainable.
"China notwithstanding, it would surprise if the Australian market continued to be priced at a premium to the rest of the world and, for big funds that are able to invest anywhere, Hawkins's analysis suggests that a switch towards overseas markets is in order.
"Most private investors here will continue to decide between investment options in the local market, however - and for them the question posed by Hawkins's analysis is: will the historical norm be reasserted by a retreat here, or a rise overseas? If it is the former, now is the time to consider shifting some money out of local shares and into alternatives. If it's the latter, shares and the relatively attractive income they are generating by way of dividends should still be a good place to be...."
This and more at: http://www.smh.com.au/news/business/australia-races-ahead-of-the-pack/2005/10/02/1128191605185.html#
posted by Guambat Stew at Tuesday, October 04, 2005
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