May 6 (Reuters) - Asian equities valuations jumped to the highest since January at the end of April, following a sharp recovery in regional shares last month due to the stimulus measures unveiled by governments to mitigate the damage caused by the coronavirus pandemic.
MSCI's broadest index of Asia-Pacific shares .MIAP00000PUS gained 8.13% in April, recording its best month in more than four years. The surge drove the index's 12-month forward price-to-earnings (P/E) ratio to 13.46 at end-April, compared with 11.79 a month earlier.
Asian equities reflect excessive optimism about corporate performance, ANZ Bank said in a report, warning that the first-quarter corporate results might reflect the full scale of the growth shock that would lead to renewed downward pressure on regional equities.
So far, Asia's large- and mid-cap firms have posted a 17% fall in first-quarter net profits, data from Refinitiv Eikon showed.
China, Vietnam and South Korea shares were the cheapest in the region, with P/E ratios of 9.6, 10.4 and 10.6, respectively.
New Zealand was the most expensive with a P/E ratio of 28.3, followed by Thailand and India.
Despite the sharp recovery last month, Asian shares lagged their global peers in terms of valuations. MSCI's World Index .MIWD00000PUS gained about 10.6% last month and its P/E ratio jumped to a 16-year high of 16.62.
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https://tmsnrt.rs/2YADUu3 Valuations of Asia-Pacific equities IMAGE
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