Trends expert Michael Keppler
continually researches every
major global stock market
and compares their values
based on current
book to price, cash flow to price, earnings to price, average dividend
yield, return on equity and cash flow return. Here is his most recent
Major Markets equities followed a strong year on a strong note. This
month’s Morgan Stanley Capital International (MSCI) World Index
climbed 2.2 % in local currencies, US dollars and in euros.
In 2005 the benchmark for global equity investors gained 15.8 % in
local currencies, 9.5 % in US dollars and 26.2 % in euros.
This last month in local currencies seventeen markets had positive
returns and the US market was unchanged.
Japan turned in the best monthly performance with a 7.1 % gain,
followed by Denmark (+6.6 %) and Sweden (+5.3 %). The poorest
performers were the US, (unchanged), Hong Kong (+0.9 %) and Spain
For the third year in sequence, all eighteen markets followed had
positive returns in 2005. From that point of view the recovery in the
equity markets of the developed world, which began in Spring 2003, has
been very broadly based.
The three best performing markets of the last year were Japan (+44.6
%), Denmark (+43.9 %) and Austria (+43.6 %). The US (+5.1 %), Hong
Kong (+8.1 %) and Singapore (+16.5 %) were the "underperformers".
Global diversification remains the name of the game for equity
investors. For the year, Keppler’s Top Value Model Portfolio
gained 31.3 % in local currencies, 14.7 % in US dollars and 32.1 % in
euros, outperforming the MSCI World Index by an enormous
15.5% percentage points in local currencies. However, due to the
appreciating US dollar, the value added was "only" 5.2 percentage
points if performance is measured in US dollars and 5.9 percentage
points in euros.
Keppler made two changes in performance ratings this month.
Singapore is upgraded from "Neutral" to "Buy" and Denmark
downgraded from "Buy" to "Neutral". During the two years
months when Denmark was rated "Buy" it had an annualized total return
of 33.4 % as compared to a total annual return for the MSCI World
Index of 19.2 %.
After adding Singapore and eliminating Denmark, the Top Value Model
Portfoliocontains Belgium, France, Germany, Italy, the Netherlands and
Singapore at equal weights.
Keppler’s current ratings suggest that these markets offer the highest
expectation of risk adjusted performance.
Keppler's worst value markets (sell rating) remain the same with
Austria, Canada, Hong Kong, Japan, Switzerland and the US.
Neutrally rated markets include Australia, Norway, Denmark, Spain,
Sweden and the UK.
You can get ideas on shares in these top value major global stock
markets from Thomas Fischer at FISCHER@jyskebank.dk
For more details on Keppler's analysis, contact Michael Keppler at
Until next message, good global investing!
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