Philippine stock market 'most overvalued' in Asia -- HSBC

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Philippine stock market 'most overvalued' in Asia -- HSBC
Posted: 1:58 AM | Apr. 08, 2006

XFN-Asia

THE Philippines has the "most overvalued" stock market in Asia, even as the economy is expected to grow at an unimpressive rate of 4.7 percent this year, HSBC said.

The Philippine equities market is pushed up by a few expensive stocks, such as beverage and food conglomerate San Miguel Corp and property developer Ayala Land Inc., HSBC said in its Pan-Asian Equity Strategy report.

However, shares of Philippine utilities and energy companies are the cheapest in the region, it said.

"The Philippines is a surprisingly expensive market, on a forward price-to-earnings ratio of 13.1 times and price-to-book ratio of 1.9 times," HSBC said.

"On our dividend discount model, the Philippines is the most overvalued market in the region," it said.

The bank said the Philippines has always been expensive, with its five-year average price-to-earnings ratio at 13.7 times. With INQ7.net