US stock market "the highest price" in the world
Mubasher: A recent report that the US stock market is "the most expensive" around the world, with the rise of market indices to record levels during the last period.
The stock market in the United States was ranked last among 40 countries in the list of "the most marketable in terms of the reasonableness of stock prices," Star Capital said in a report released Tuesday.
The criteria used by the list included price-to-revenue ratio, price to sales, and price to book value.
US equity indexes have recorded a record performance in the past period, with the Dow Jones up 21,500 points and Standard & Poor's up 2400 points, supported by speculation of more stimulus measures and expectations of slower rate hikes.
While high valuations do not necessarily imply the expectation of near-market selling, it suggests that there is more room for less-rated markets to record higher returns in the future.
Data indicate that the most worrying signal for the US market was the price to earnings ratio, which measures the share price relative to the company's revenue over the last 10 years.
The US stock market averaged 28 times for the price-earnings standard, followed only by Denmark and Ireland.
In terms of price to book value, the United States is second in terms of the most expensive stock markets, at 3.1, only ahead of Indonesia by 3.3.
The United States also has the highest-priced stock markets: Belgium, the Philippines, India, Indonesia, Switzerland and Canada.
The cheapest stock exchanges
On the other hand, the South Korean Stock Exchange came in the top of the list of least-priced, followed by Austria, the Czech Republic, Hungary, Italy, Poland, Portugal and Turkey.
On the price-to-book side, Russia and China are the least expensive among the countries included in the report, with the Russian stock market at 0.8, while China has 0.9.