Business
Market watch: India’s equity valuations dip below long-term averages; but stay elevated versus peers – The Times of India
India’s equity valuations are trading marginally below their historical averages but continue to remain expensive compared with regional peers, raising concerns amid slowing earnings growth.The benchmark Nifty currently trades at a price-to-earnings (PE) ratio of 21.97 times, lower than its five- and 10-year averages of 24.4 and 24.8, respectively. In contrast, Hong Kong’s Hang Seng is at 11.7, South Korea’s Kospi below 13, and South Africa at around 12.7, according to an ET report.Valuations in India have traditionally traded at a premium to peers, supported by strong growth prospects. However, with corporate earnings momentum weakening, foreign investors are paring exposure and holding back fresh allocations.
“Valuations have begun mattering now because nominal GDP growth has slipped into single digits compared to around 12-13%,” said Ritesh Jain, founder of Pinetree Macro, a global macro asset allocation fund. “Corporate profitability is a function of nominal GDP. So, for an overseas fund manager looking at various markets, a country with slowing nominal growth and rich valuations is far less appealing despite its inherent strengths.”India is now the second-most expensive major market after the US, with some global fund managers increasingly shifting allocations to cheaper Chinese, European, and Japanese equities.Fund managers also noted that index composition plays a key role in valuation levels. “The composition of Indian indices must be taken into account while looking at valuations,” said Nilesh Shah, managing director, Kotak Mutual Fund. “If the Sensex and Nifty are full of expensive consumer names and there are fewer commodity players, it’s bound to push up valuation levels. If we were to remove some of the consumer names, our valuations are around averages on a historical basis.”
Former Asda boss Roger Burnley is to join the board of Marks & Spencer.
He will become a non-executive director of the high street giant from December 1, the company told shareholders on Thursday.
The retail veteran was the boss of rival Asda from 2017 until 2021, when he left the business following its £6.8 billion takeover by the Issa brothers and TDR Capital.
He was retail operations director at Sainsbury’s before moving to Asda and is currently a non-executive director at Pets at Home.
Mr Burnley will become the latest supermarket heavyweight to join the business, after former Sainsbury’s boss Justin King stepped down earlier this year.
Mr King left the board in September after around six years.
The appointment comes after a turbulent year for Marks & Spencer after it was hit by a major cyber attack which forced it to shut down online sales for around six weeks.
It said the attack has cost the company around £300 million.
Mr Burnley said: “M&S is a much-loved brand which I have always admired as setting the standard in UK retail, and it is a privilege to be joining such an engaged board.
“Much progress has been made through the reshaping for growth strategy, but there remains so much opportunity, and I am looking forward to supporting the leadership team to capitalise on that in the years ahead.”
M&S chairman Archie Norman said: “Roger brings extensive experience in the food retail industry and supply chain transformation which will be invaluable as we enter the next phase of our plan to reshape M&S for growth.
Seoul: South Korean automakers Hyundai Motor Co. and Kia Corp. are ramping up efforts to expand their presence in Japan with new hydrogen and electric vehicles (EVs), as per a report by Pulse, the English service of Maeil Business News Korea. At the Japan Mobility Show in Tokyo, which kicks off on Thursday, Hyundai Motor and Kia are expected to make their first joint appearance, targeting a market traditionally dominated by domestic automakers and internal combustion engine vehicles.
The report stated that before the event on Wednesday, Hyundai premiered The All-New NEXO, its latest hydrogen fuel cell electric SUV, while Kia debuted its PV5 purpose-built electric van.
“The All-New NEXO, which rivals the Toyota Mirai, is powered by a 150kW motor. It accelerates from zero to 100 km/h in 7.8 seconds, and offers a driving range of up to 720 km. Refueling takes about five minutes. Local sales are set to begin in the first half of next year. Kia also showcased its INSTER, known in Korea as the Casper Electric, and KONA Electric. The automaker said it plans to enter Japan’s electric van market next year with the PV5. The company expects rising demand as Japan aims to have 30 per cent of new car sales be electric by 2030,” the release said.
The automaker has partnered with Japan’s trading firm Sojitz Corp. to establish Kia PBV Japan, a joint venture focused on electric commercial vehicles.
Japan’s auto market remains dominated by domestic brands, led by Toyota, which controls nearly 90 per cent of the entire sales. Hyundai Motor re-entered Japan in 2022 after a 13-year absence.
“We will tailor our approach specifically for Japan,” said the report, quoted Hyundai Vice President Chung Yoo-suk. “In the compact car segment, we achieved our business plan for the first time this year since re-entering the market, and plan to continue introducing new models from next year.”
The Government is being urged to go “further and faster” to protect the car industry from energy costs.
The TUC said high energy bills in the UK meant car makers were struggling in the face of competition from abroad.
On a visit to the Jaguar Land Rover factory in Solihull, the TUC general secretary Paul Nowak called on the Government to put its “foot on the accelerator” and speed up support for the UK car industry.
He said: “Car making is one of the jewels in the crown of British industry, and British classics like Range Rover and Jaguar are iconic around the world.
“But sky-high energy costs mean we risk losing out to competition from abroad.
“The Government has set out welcome support in the industrial strategy, but must go further and faster to bring down energy bills for British businesses.
“It’s time for the Government to put its foot on the accelerator, and act now to protect jobs and manufacturing in the UK.”
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