A new look at what the street is thinking
􀂄 What the street thinks of Asian stocks
This regular publication aims to help clients track changing analyst sentiment
towards Asian stocks. We introduce several major enhancements in this edition,
including analysis on sales momentum, growth forecasts, margin assumptions and
earnings visibility, as well as granular analysis at the country-sector level.
􀂄 Turnaround in analysts’ bullishness last month
Analysts became more bullish last month after almost two years of declines. The
rise in bullishness was the largest increase in almost three years, and is especially
encouraging as it is from a relatively low level. This leaves room for further
improvement in sentiment.
􀂄 Momentum and margins fell, but growth remained stable
Earnings revisions and momentum remained negative in November, slightly
worsening from the previous month. However, the recent trend shows some
improvement and forecasts could be bottoming. Growth forecasts for FY13 and
FY14 remained stable. Margin forecasts also fell, but appear to be stabilising.
􀂄 Signs of improvement are encouraging
While the continuing decline in earnings is not encouraging, our sense from
studying the recent data is one of relative optimism. We see signs of improvement
in several areas, including a turnaround in analyst sentiment, the potential
bottoming of earnings momentum and net margins, and improving earnings
visibility. Continued improvement could be constructive for Asian markets over
the next few months.