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 Financial Happenings Blog 
Tuesday, June 16 2009
The latest edition of our email newsletter has been sent to subscribers.

In this edition we:
  • discuss the topic of unlisted assets and suggest investors carefully check the nature of any unlisted assets before switching into this asset class,
  • look at S&P's latest World by Numbers publication,
  • summarise the movements in markets since the last edition including 3, 5 and 10 year return history,
  • encourage readers to switch off or turn doen the financial media they are listening to,
  • provide a link to Scott Francis' latest Eureka Report articles,
  • link to recent videos uploaded to the Fama & French Forum,
  • provide evidence of the three factor model in action, and
  • provide links to podcasts recently uploaded to the website.

Click on the following link to have a look at the full newsletter - Financial Fortnight That Was - 16th June 2009.

 

The market update section is set out below:

 

ASX P/E Ratio and Dividend Yields

 

The P/E ratio is a common broad indicator of the price of shares.  It is a calculation of the price of shares compared to expected earnings.   A higher ratio indicates that share prices are more expensive.  The historical P/E ratio for the ASX has been between 14 & 15.  The dividend yield is the calculation of dividend payments divided by the market capitalisation of the company or index.  The historical average in Australia is around 4%.

 

As of June 9th the P/E ratio for the S&P/ASX 200 was 10.78.  The dividend yield was 5.26%.


Volatility Index (VIX)

 

Another index we are keeping an eye on in the USA is the CBOE Volatility Index.  This index purports to be a key measure of market expectations of near term volatility conveyed by the S&P 500 share index.  The higher the level of index, the higher are expectations for volatility in the S&P 500 index.  For more information on how the VIX is calculated please take a look at  - www.cboe.com/micro/vix/introduction.aspx

 

The latest close for the index was at a level of 30.81.  This is slightly higher than the 12 month low of 26.57 but well off the 12 month high of  80.74.

 

Market Indices

 

 

Since last ed.

Since Start of 2009

1 Year

3 Year

5 Year

10 Year

Australian Shares

 

 

 

 

 

 

S&P - ASX 200

7.99%

9.13%

-23.78%

-6.48%

3.22%

NA *

International Shares

 

 

 

 

 

 

MSCI World - Ex Australia

5.66%

8.34%

-26.94%

-6.48%

0.23%

-0.76%

MSCI Emerging Markets

5.29%

34.47%

-20.03%

8.23%

15.53%

11.25%

Property

 

 

 

 

 

 

S&P - ASX 200 REIT

16.90%

-13.59%

-49.17%

-27.04%

-13.70%

NA *

S&P/Citigroup Global REIT - Ex Australia - World - AUD

4.34%

-15.72%

-32.08%

-17.88%

-3.05%

4.77%

Currency

 

 

 

 

 

 

US Exchange Rate

4.71%

17.54%

-13.18%

3.01%

3.25%

2.07%

Trade Weighted Index

4.66%

17.09%

-9.64%

1.46%

1.77%

1.04%

 * - Data unavailable as ASX 200 only commenced on 31st March 2000

 

General News
 
The following major economic parameters have been announced since the previous edition:
  • Unemployment now at 5.7% (predicted to rise to 8.25% in Federal budget)
  • Economic growth of 0.4% in the March quarter 2009 and 0.4% for the year.
  • RBA left official interest rates at 3.0% in the June board meeting.
  • Westpac-Melbourne Institue consumer confidence index has risen to 100.1 in June, a 12.7% rise.
  • NAB business confidence index moved from minus 14 to minus 2.

Regards,

Scott Keefer

Posted by: Scott Keefer AT 06:00 pm   |  Permalink   |  Email
 
Scott Francis' articles in the Eureka Report 
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