Global Index Briefing: Emerging Markets MSCI August 18, 2016 Dr. Ed Yardeni 16-972-7683 eyardeni@ Joe Abbott 732-497-306 jabbott@ Please visit our sites at www. blog. thinking outside the box
Table Of Contents Table Of Contents Emerging Markets MSCI Stock Price Index 1 Blue Angels Forward Earnings and Valuation 2 Earnings 3 Revenues 4 NERI & Margins Earnings Growth & Valuation 6 August 18, 2016 / Global Index Briefing: Emerging Markets MSCI www.
Stock Price Index 9000 49000 39000 Figure 1. EMERGING MARKETS MSCI INDEX (ratio scale) Local currency US$ 8/18 1600 1400 1200 00 29000 600 19000 400 9000 199 1996 1997 1998 1999 2000 2001 2002 2003 2004 200 2006 2007 2008 2009 20 2011 2012 2013 2014 20 2016 2017 Source: Morgan Stanley Capital International. 200.040 Figure 2. EMERGING MARKETS MSCI INDEX CURRENCY RATIO (US$ index / local currency index).040.03.03.030.030.02.02.020 8/18.020.0.0.0 199 1996 1997 1998 1999 2000 2001 2002 2003 2004 200 2006 2007 2008 2009 20 2011 2012 2013 2014 20 2016 2017 Source: Morgan Stanley Capital International..0 Page 1 / August 18, 2016 / Global Index Briefing: Emerging Markets MSCI www.
00 70000 60000 Figure 3. Blue Angels Forward Earnings and Valuation EMERGING MARKETS MSCI, FORWARD EARNINGS, & VALUATION (in local currency) Emerging Markets MSCI Index 08/12/16 Blue Angels Implied Price Index* 08/0/16 x 00 70000 60000 0000 0000 40000 x 40000 30000 30000 20000 x 20000 000 2007 2008 2009 20 2011 2012 2013 2014 20 2016 2017 000 * Implied price index calculated using forward earnings times forward P/Es. Source: Morgan Stanley Capital International and Thomson Reuters I/B/E/S. 2000 170 00 Figure 4. EMERGING MARKETS MSCI, FORWARD EARNINGS, & VALUATION (in US$) Emerging Markets MSCI Index 08/18/16 Blue Angels Implied Price Index* 08/04/16 2000 170 00 120 120 00 x 00 70 x 70 00 20 x 2007 2008 2009 20 2011 2012 2013 2014 20 2016 2017 00 20 * Implied price index calculated using forward earnings times forward P/Es. Source: Morgan Stanley Capital International and Thomson Reuters I/B/E/S. Page 2 / August 18, 2016 / Global Index Briefing: Emerging Markets MSCI www.
Earnings 600 00 400 Figure. EMERGING MARKETS MSCI EARNINGS PER SHARE (in local currency) (analysts average forecasts, ratio scale) 16 17 600 00 400 300 8/ 300 200 200 00 00 Forward earnings* 00 199 1996 1997 1998 1999 2000 2001 2002 2003 2004 200 2006 2007 2008 2009 20 2011 2012 2013 2014 20 2016 2017 00 * Time-weighted average of the consensus estimates for current and next year. Monthly through December 200, weekly thereafter. 0 130 1 Figure 6. EMERGING MARKETS MSCI EARNINGS PER SHARE (in US$) (analysts average forecasts, ratio scale) 16 0 130 1 90 17 90 70 70 0 0 30 30 Forward earnings* 199 1996 1997 1998 1999 2000 2001 2002 2003 2004 200 2006 2007 2008 2009 20 2011 2012 2013 2014 20 2016 2017 * Time-weighted average of the consensus estimates for current and next year. Monthly through December 200, weekly thereafter. Page 3 / August 18, 2016 / Global Index Briefing: Emerging Markets MSCI www.
Revenues 90 Figure 7. EMERGING MARKETS MSCI REVENUES PER SHARE (in local currency) (analysts average forecasts, ratio scale) 16 17 90 60 8/ 60 00 00 30 30 Forward revenues* 200 2004 200 2006 2007 2008 2009 20 2011 2012 2013 2014 20 2016 2017 200 * Time-weighted average of the consensus estimates for current and next year. Monthly through December 200, weekly thereafter. 1 1600 Figure 8. EMERGING MARKETS MSCI REVENUES PER SHARE (in US$) (analysts average forecasts, ratio scale) 16 1 1600 1400 17 1400 1200 1200 00 00 600 Forward revenues* 600 400 2004 200 2006 2007 2008 2009 20 2011 2012 2013 2014 20 2016 2017 400 * Time-weighted average of the consensus estimates for current and next year. Monthly through December 200, weekly thereafter. Page 4 / August 18, 2016 / Global Index Briefing: Emerging Markets MSCI www.
Figure 9. NERI & Margins EMERGING MARKETS MSCI NET EARNINGS REVISIONS* 0 0 - Jul - - - - - -20-2 -30 NERI May -.8 Jun -4.3 Jul -3.2 199 1996 1997 1998 1999 2000 2001 2002 2003 2004 200 2006 2007 2008 2009 20 2011 2012 2013 2014 20 2016 2017-20 -2-30 * Three-month moving average of the number of forward earnings estimates up less number of estimates down, expressed as a percentage of the total number of estimates. 11 Figure. EMERGING MARKETS MSCI PROFIT MARGIN (using analysts average earnings and revenues forecasts) 11 9 9 8 8 7 7 6 Forward profit margin* (6.3) 16 17 6 2004 200 2006 2007 2008 2009 20 2011 2012 2013 2014 20 2016 2017 * Time-weighted average of the consensus estimates for current and next year. Monthly through December 200, weekly thereafter. Page / August 18, 2016 / Global Index Briefing: Emerging Markets MSCI www.
70 60 0 40 Figure 11. Earnings Growth & Valuation EMERGING MARKETS MSCI STEG, STRG, & LTEG (percent) LTEG* (13.3) STEG* (11.2) STRG* (7.) 70 60 0 40 30 30 20 20 0 0 - -20 199 1996 1997 1998 1999 2000 2001 2002 2003 2004 200 2006 2007 2008 2009 20 2011 2012 2013 2014 20 2016 2017 - -20 * STEG: 12-month (2-week) forward consensus expected earnings growth. STRG: 12-month (2-week) forward consensus expected revenue growth. LTEG: -year consensus expected earnings growth. Monthly data through 200, weekly thereafter. 2 Figure 12. EMERGING MARKETS MSCI VALUATION 2 20 Forward P/E* (12.1) 20 1.0 1.2 1.00 Relative P/E** (0.8) PEG Ratio*** (0.9) 1.0 1.2 1.00.7.7.0.2 199 1996 1997 1998 1999 2000 2001 2002 2003 2004 200 2006 2007 2008 2009 20 2011 2012 2013 2014 20 2016 2017.0.2 * Price divided by forward consensus expected operating earnings per share. Monthly through December 200, weekly thereafter. ** Forward P/E relative to MSCI World forward P/E. *** Forward P/E relative to consensus -year LTEG forecast. Page 6 / August 18, 2016 / Global Index Briefing: Emerging Markets MSCI www.
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