First off, Lehman notes that inflation is coming off, and that will lead, as it always has, to P/E expansion which, they believe, will offset the cr@ppy earnings prospects into a slowing global economy.
"... the recent drop in oil prices and, in developed economies at least, absence of significant second-round effects should mean that global inflation falls from 4.4% in 2008 to 2.4% in 2009... if the historical relationship is maintained, this decline in headline inflation ought to be consistent with... an expansion in the P/E multiple from 13.9x to 20.0x."
Meanwhile, back in Asia, JP notes a clear decline in food prices, which should lead, in my view, to an outsize improvement in inflation prospects and hence, if you follow Lehman, an outsize Asian market re-rating.
"While recent declines in oil prices have grabbed more attention, food price trends are actually more important for inflation in Emerging Asia because they have much bigger weights than energy prices in most countries’ consumer price indices."
And since I'm so good at Excel stuff and not messing it up...
Stumble It!::
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