Asia’s large capital inflows are not a one-week wonder. The stellar performance of the region’s equity markets last week is just an acceleration of the existing trend.
The key stock market index for Asia is up 10.2 percent since the beginning of the year (compared with 2 percent for the Dow and 0.5 percent for the euro area),and a whopping 19.3 percent over the last twelve months (compared with 13 percent for the Dow and 10 percent for the euro area).
And Asia looks like it is just warming up: Its key equity markets gauge is trading at about 13 times estimated earnings, compared with P/E ratios of 16 and 15 in the U.S. and Europe, respectively.
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