(Reuters) – The valuations of Asian shares based on forward earnings dropped to a four-month low in October, boosting the allure of Asian equity markets as the region recovers from the coronavirus pandemic.
The forward 12-month price-to-earnings ratio (P/E) for MSCI’s broadest index of Asia-Pacific shares fell to 15.9 at the end of last month, the lowest since June. That compares with 18.3 for the MSCI World index.
Graphic: MSCI Asia and World index PE
The forward P/E ratio values a stock based on its estimated earnings for the next 12 months, and the ratio falls when analysts project higher growth.
Analysts have raised Asian companies forward 12-month earnings estimates by 1.5% over the past month, with the region witnessing fewer numbers of COVID-19 cases and most