Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : Asia Forum -- Ignore unavailable to you. Want to Upgrade?

To: smolejv@gmx.net who wrote (3486)	5/12/1998 3:12:00 AM
From: tom	Respond to of 9980

If you suppose that equity is more expensive that debt (though this is strangely and rarely the case in Asia I must admit) then a good rule of thumb is that P/E ratios should be the inverse of interest rates and interest rates in Indonesia are 30-50%. Also looking at Russia in recent years, P/Es did get down to those levels. In crisis economies (civil war, hyperinflation etc) valuations do normally get down to fantastically cheap valuations. Most big Indobluechips are trading on big multiples but there is value in the less well known names. Curiously enough, the real value is in the exporters - the only section of the economy to be doing OK at the moment. eg. Tambang Timah, the world's largest, and by far the lowest cost, producer of tin in the world (GDR listed in London) trades on 3x earnings.