Major Southeast Asian stock markets are trading at attractive price-to-book valuations close to or below their 2011 lows and investors should find value plays in blue chips supported by domestic economy and earnings, CIMB says.
The broker is "overweight" on Indonesia and Singapore, which stand out in terms of valuations, according to its ASEAN value hunting rules report. It rated Malaysia and Thailand "neutral" and the Philippines "underweight".
Indonesia's estimated price-to-book value of 2.4-2.8 times for 2012-13 was around 16 percent below the 2003-07 cycle mean. Singapore's estimated price-to-book of 1.3 times for 2012 was about 38 percent below the 2003-07 cycle, it said.
Consumer and commodities-linked stocks are among CIMB's top picks as their fundamentals remain strong and valuations are getting attractive.
Indonesian consumer stock Indofood Sukses Makmur , for instance, traded at a price-to-book ratio of 2.06 times compared with a low in 2011 of 2.08 times, it said.
Singapore commodity firm Olam International Ltd traded at 1.36 times against a 2011 low of 1.63 times while Thai petrochemical firm PTT Global Chemical Pcl was at 1.32 times below a 2011 low of 1.38, it said.
1600 (0900 GMT) (Reporting by Viparat Jantraprap in Bangkok; firstname.lastname@example.org)