Buttonwood
By The Economist
From The Economist
Published: December 10, 2012
Dismal bond yields make European equities look relatively attractive.
Nov 24th 2012 | from the print edition
AT THE start of June, with Greece heading for a second election in six weeks and a possible exit from the euro, few investors were enthusiastic about the European stockmarket. But those are often the moments when assets are most attractive.
Back then, European stocks were trading on a dividend yield of 4.1%—more than twice the income on German government bonds—and the cyclically adjusted price-earnings ratio was close to a 30-year low.
When shares are cheap, it is hard to know what the trigger for their revaluation will be. But usually something comes up. The fairy godmother turned out to be Mario Draghi, the president of the European Central Bank (ECB), who said on July 26th that he would do "whatever it takes" to save the euro. As the chart shows, the speech coincided with the end of a long period of underperformance of European equity relative to Wall Street. Investors immediately assumed that, with the ECB committed to acting as the lender of last resort for the currency system, the euro zone was less likely to break up.
The most troubled euro-zone countries saw the biggest rebounds. The Greek equity market has risen by 40% since Mr Draghi's speech, and Spain's has rebounded by 30%. So much bad news had been priced into the two markets that investors started to believe that a few bargains might be available.
Institutional investors, who were negative on the outlook for European markets earlier in the year, have turned marginally positive, according to a survey by Bank of America Merrill Lynch. Retail investors have started to get back into the market. In September European mutual funds received €28.9 billion ($37.2 billion), according to Lipper, a data-collection company. That was the largest inflow for almost two years.
Ironically, this improvement in sentiment has been accompanied by a flood of poor economic data showing that euro-zone output fell in the third quarter of the year, putting the region back into recession. Other measures, such as purchasing managers' indices, also look pretty gloomy.
With the economy sluggish, it will be hard for profits to rise substantially. What is more, profit margins are already close to a 15-year high, according to Citigroup. Consensus forecasts currently suggest that European earnings growth next year will be 11.6%. But that number should be taken with a bucket of salt, as estimates are still being revised lower. Analysts were similarly bullish about the prospects for profit growth at the start of 2012; the outcome is likely to be a fall of 0.5%.
This is part of a long-established game played in the stockmarket. Analysts proclaim that the market is cheap relative to prospective earnings, and advise that investors should pile into shares. As the year progresses, they revise down their forecasts to reflect guidance from corporate executives. Thanks to those downward revisions, companies are able to beat those lower estimates. Analysts can then declare that the stockmarket is attractive because profits were ahead of forecasts, and will be even better next year. So the cycle begins again.
But the important thing to remember is that Europe is not an emerging market and nobody should be expecting rapid domestic growth. Plenty of European companies sell goods and services to emerging markets, however, and their prospects are thus not entirely moribund. Thinking of European equities as a source of income, rather than capital gains, puts the issue in a more helpful light.
The dividend outlook has deteriorated a bit but it is still broadly positive. According to Deutsche Bank, some 38% of listed European companies have increased dividends this year, compared with 15% that have cut payouts. The relationship has worsened since 2011 but it is still better than in 2009, when 24% of companies reduced their dividends and 13% suspended them altogether.
No one can be sure of the economic outlook, but history suggests that starting valuations are a good guide to future returns. In Austria, the Netherlands, Sweden and Switzerland investors can get a higher yield from shares than they can from ten-year government bonds; in France and Germany, equities yield more than 30-year bonds as well.
Although this may indicate only that government bonds are a terrible long-term investment, it still gives equity investors a bit of a cushion against disappointment in the form of dividend cuts. And cash will not deliver a decent return for many years to come; central banks will make sure of that.
歐債危機 正是歐股轉機
2012-11-28 天下雜誌 511期 作者：經濟學人
自歐洲央行總裁德拉吉宣布，將不計一切代價拯救歐元以來，希臘和西班牙股市，已分別反彈四成與三成。歐債危機，反成了歐股的轉機？
六月初，希臘大選進行兩次投票才終於產生執政黨，脫離歐元區的呼聲甚囂塵上之際，投資人對歐股避之唯恐不及。但往往是這樣的時刻，才是資產最物超所值的時候。
那時，歐股殖利率為四．一％，是德國政府公債殖利率的兩倍多。而經過景氣循環調整的本益比，也接近三十年來的低點。
股價便宜時，很難看出有什麼因素，會觸動股價重估，但總會有某個原因。這次，歐洲央行總裁德拉吉（Mario Draghi）就是那個觸媒。
德拉吉在七月二十六日表示，「將不計一切代價」拯救歐元。而技術線圖也證實，那正是歐股表現終止長期落後美股的開始。
投資人猜測，歐洲央行既然已有決心做好歐元最後借貸者角色，則歐元區解體的可能性，也就降低了。
美林證券的調查顯示，年初對歐洲股市前景持負面看法的法人，也已經有所轉變。散戶已開始回到歐股。基金研究機構理柏（Lipper）的資料顯示，投資歐洲股市的共同基金，在九月有二八九億歐元的資金流入，是近兩年來最大的金額。
諷刺的是，於此同時，歐元區卻發布一連串的低迷經濟數據。例如，第三季經濟再度衰退，以及採購經理人指數顯示，景氣陷於緊縮泥淖之中。
經濟不振，很難期待企業獲利能有大幅成長。更何況，據花旗集團指出，歐洲企業利潤，已逼近十五年來的高點。
而市場預估，明年歐洲企業獲利的成長幅度為一一．六％。只是這樣的估算，必須謹慎參考，因有不少企業還在下調他們的獲利預估。
投資人要記得，畢竟歐洲不是個新興市場，無法對其內需市場的快速成長有所期待。倒是有不少歐洲企業，產品與服務輸往新興市場，因而獲益於新興市場的快速成長。他們的獲利前景，是可以期待的。
歷史數據也顯示，奧地利、荷蘭、瑞典與瑞士的股市殖利率，超過十年公債；法國和德國股市殖利率，也超過三十年公債。
雖然，這也只是表示，政府公債是糟糕的長期投資工具，卻也讓股市投資者，在面對公司削減股息時，不致太過失望；況且，各國央行未來幾年會持續印鈔票，死抱著現金，是難以有滿意報酬的。（林昭儀譯）
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