KOSPI
Kospi's 12-month P/E ratio hits a 13-year high
By Aug 10, 2020 (Gmt+09:00)
1
Min read
Most Read
Samsung shifts to emergency mode with 6-day work week for executives
Alibaba eyes 1st investment in Korean e-commerce platform
Blackstone signs over $1 bn deal with MBK for 1st exit in Korea
NPS loses $1.2 bn in local stocks in Q1 on weak battery shares
MBK eyes stake in Korean software developer Tmaxsoft
Kospi has posted a 13-year high with 12-month forward price-earnings ratio recording 12.84 times on August 6, according to financial data provider FnGuide.
This is the highest on a monthly basis since July 2007 when the P/E ratio posted 12.95, right before the US subprime mortgage crisis broke out. In June 2000, the P/E ratio posted as high as 20.1 during the IT bubble.
There are concerns over the high valuation of the Korean stock market. There are views that the global coronavirus pandemic will extend companies' poor performance throughout the second half of the year which widens the gap between the real economy and the stock market.
Yet, experts agree that it is difficult to assess the stock market with existing criteria given that there is an inflow of massive liquidity due to the market interest rate dropping to almost 0%.
P/E ratio is calculated by dividng the company's share price with the net return per share. It shows the current value of the stock compared to the company's earnings. In the securities industry, it is a common practice to use the P/E ratio which reflects earnings projection instead of past earnings since share prices move based on the company's future valuation.
Write to Jin-sung Kim at jskim1028@hankyung.com
This is the highest on a monthly basis since July 2007 when the P/E ratio posted 12.95, right before the US subprime mortgage crisis broke out. In June 2000, the P/E ratio posted as high as 20.1 during the IT bubble.
There are concerns over the high valuation of the Korean stock market. There are views that the global coronavirus pandemic will extend companies' poor performance throughout the second half of the year which widens the gap between the real economy and the stock market.
Yet, experts agree that it is difficult to assess the stock market with existing criteria given that there is an inflow of massive liquidity due to the market interest rate dropping to almost 0%.
P/E ratio is calculated by dividng the company's share price with the net return per share. It shows the current value of the stock compared to the company's earnings. In the securities industry, it is a common practice to use the P/E ratio which reflects earnings projection instead of past earnings since share prices move based on the company's future valuation.
Write to Jin-sung Kim at jskim1028@hankyung.com
Danbee Lee edited this article
More to Read
-
Private equityAffinity eyes full control of food container maker Lock & Lock
Apr 18, 2024 (Gmt+09:00)
Comment 0
LOG IN