| Real estate stocks in India are the most | | | | Germany, Finland, Greece, Ireland, Norway, |
| expensive in the world even as they give | | | | Sweden, China, Indonesia, Malaysia, |
| lower returns than most of the emerging as | | | | Philippines, South Africa, Taiwan and |
| well as developed markets including China, | | | | Thailand. |
| Singapore, Hong Kong and Australia. | | | | |
| | | | The rally in the emerging market realty |
| The revelation has come in the backdrop of a | | | | stocks, appears to be mostly driven by the |
| seven-year bull run in the global property | | | | Chinese stocks with top five global gainers |
| stocks coming to an end in the second quarter | | | | for the quarter coming from China. |
| of 2007, although emerging markets bucked the | | | | |
| trend, according to second-quarter review of | | | | Globally, property stocks fell by 4.5 per |
| property sector by international investment | | | | cent on an average in the quarter as measured |
| services firm Standard & Poor's. | | | | by the S&P Citigroup Global Property Index |
| | | | with sharp falls being registered by the |
| A comparison of price to earnings ratio of | | | | stocks from the US, Europe and other North |
| stocks from various countries showed that | | | | American markets. |
| valuation of property stocks from the US and | | | | |
| UK moved lower, while those from emerging | | | | However, emerging market stocks delivered a |
| market continued to grow. | | | | positive return of 19.4 per cent in the |
| | | | quarter and 26.7 per cent since the beginning |
| P/E ratio is considered as valuation | | | | of 2007. On a one-year basis too, the |
| benchmark of a stock where a higher ratio | | | | emerging markets crossed the global average |
| indicates an expensive stock while lower P/E | | | | of 27.8 per cent by a wide margin, |
| signifies a cheaper stock. | | | | registering a gain of 90.6 per cent. |
| | | | |
| P/E ratio for Indian stocks for the trailing | | | | Top five performers were Medinet Nasr Housing |
| 12 months was highest among all countries, | | | | from Egypt, China Vanke Co, Beijing North |
| while return on equity (ROE) was second | | | | Star Co and Shg Lujazui from China, besides |
| lowest among all emerging markets and lower | | | | Amata Corp from Thailand. |
| than most of the developed markets. | | | | |
| | | | "A prolonged seven-year stretch of continuous |
| The S&P study put the last 12-month P/E for | | | | gains, leading to excessive valuations, |
| Indian stocks at 209.30, against just 29.69 | | | | decreasing yields and a legitimate desire for |
| in China, 39.90 for the US and 3.18 for the | | | | profit taking caused a sell off in the |
| UK. On ROE front, Indian stocks gave a 7.15 | | | | sector," Standard & Poors Index Services Vice |
| per cent return, lower than the global | | | | President Alka Banerjee said. |
| average of 7.3 per cent. | | | | |
| | | | She said that after such a bull run, global |
| While India's ROE was higher than that of the | | | | property and REIT stocks finally gave back |
| US (6.2 per cent) and the UK (3.05 per cent), | | | | some of the returns that have made them such |
| it was the second lowest among emerging | | | | an attractive investment in the last few |
| markets after Turkey's 4.2 per cent. | | | | years. |
| | | | |
| Besides, ROEs were more than 20 per cent for | | | | REIT indices for Europe, US and the rest of |
| stocks from markets like Denmark, Egypt, | | | | the world fell, while Asia was the only |
| Israel and Poland. | | | | market to post a gain with a modest rise of |
| | | | two per cent, she said, adding that UK REITs |
| It was over 10 per cent for markets like | | | | performed dismally. |