Thomas, over at Alphaville, picks up on a piece of research by Dresdner
Kleinwort’s James Montier. The key datapoint? Emerging-market
equities are now trading at the same multiple as developed markets, and "as
far as he can remember, that didn’t even happen during the last great
emerging market boom of the early 1990s." Check out the Alphaville post
for the chart.
I’d be much more worried about this if someone could explain to me why emerging-market
equities should trade at a lower multiple than developed markets. After
all, they generally have much higher growth rates, which would tend to imply
perhaps that they should trade at a higher multiple. And big emerging-market
companies today have no more difficulty raising money internationally than their
developed-market competitors.