The 12-month forward price-to-earnings
ratio of MSCI Asia-ex-Japan is 13.
In Hong Kong, for example, the financial sector trades at a forward price-to-earnings
ratio of 8.
The forward price-to-earnings
ratio on the MSCI Emerging Markets Index is currently around 13 times, compared to 17 times for large-cap US equities.
The S&P 500 is trading at a forward price-to-earnings
ratio of 17.
The professional services firm said globally, between June this year and June next year, forward price-to-earnings
ratios or P/E ratios, which is its measure of corporate appetite or confidence, are forecast to increase by 11 per cent, while net debt to earnings before interest, tax, depreciation and amortisation (EBITDA), its measure of capacity, is predicted to rise by 7pc over the same period.
We then set year-end target levels for each of them, taking into account the target forward price-to-earnings
ratio, consensus earnings growth, and adjusted for the macroeconomic view.
However, the S&P 500's forward price-to-earnings
multiple -- based on 2015 earnings expectations -- is at about 17 now, exceeding the 15-year average of about 15.
He added that he would not be concerned about valuation until the S&P's forward price-to-earnings
ratio was 17 and its trailing P/E was 20.
The S&P 500 currently trades on a forward price-to-earnings
multiple of around 15x, slightly ahead of its 10-year average of 14x, although other commentators point out that - looking at the nine previous economic cycles - the median peak forecast earnings multiple is 15x.
With a forward price-to-earnings
ratio near 8, the stock seems appealingly valued.
Chinese bank shares are the cheapest in the Asia-Pacific region with a 12-month forward price-to-earnings
ratio of 4.
Japanese shares' 12-month forward price-to-earnings
ratio has fallen to 13.