Russia and Romania are the cheapest markets based on consensus estimates and book value
Even though valuations are not as inviting as they were earlier this year and P/E has increased to a level of about 11 for the CEE region, Russia and Romania continue to be the cheapest markets based on consensus estimates and book value.
Although the markets grouped as SEE posted an impressive performance in 2Q 2009, Erste analysts continue to keep them at underweight.
“In the past, we have been fans of the Romanian market and have always mentioned this market for anyone considering an investment in this region. We continue to do so”, analysts said. Erste said recently Romania’s current account gap would sharply contract this year, to 5.7% from 12% of GDP in 2008, and that it would be 75% filled by foreign direct investments and capital inflows related to European funds.
In the second quarter this year, BET index, that gauges the performance of ten most liquid stocks at BSE increased by 40.6%. The biggest increase was registered by PFTS index in Ukraine, of 84.2%.
Specialists recommend a cautious approach toward equity investments in Russian market as it is considered relatively speculative and largely driven by commodity prices. In contrast Erste recommends Turkey as it certainly shares its burden in terms of weakness, but at the same time it still offers a good alternative also in terms of market size.
Although the markets grouped as SEE posted an impressive performance in 2Q 2009, Erste analysts continue to keep them at underweight.
“In the past, we have been fans of the Romanian market and have always mentioned this market for anyone considering an investment in this region. We continue to do so”, analysts said. Erste said recently Romania’s current account gap would sharply contract this year, to 5.7% from 12% of GDP in 2008, and that it would be 75% filled by foreign direct investments and capital inflows related to European funds.
In the second quarter this year, BET index, that gauges the performance of ten most liquid stocks at BSE increased by 40.6%. The biggest increase was registered by PFTS index in Ukraine, of 84.2%.
Specialists recommend a cautious approach toward equity investments in Russian market as it is considered relatively speculative and largely driven by commodity prices. In contrast Erste recommends Turkey as it certainly shares its burden in terms of weakness, but at the same time it still offers a good alternative also in terms of market size.