Our friend, statistical expert, Michael Keppler, continually researches all major stock markets and compares their value based on current book to price, cash flow to price, earnings to price, average dividend yield, return on equity and cash flow return. He compares each major stock market’s history and from this develops his good value emerging stock markets strategy.

Here is a condensation of his May 2006 review of major market developments & outlook.

Last month the Major Equity Markets suffered their first monthly decline since October 2005 and their worst loss in more than three years. The Morgan Stanley Capital International (MSCI) World Total Return Index for the month declined 4.4 % in local currencies, 3.4 % in US dollars and 5.3 % in euros.

For the year, the MSCI World Total Return Index finished the month of May up 2.3 % in local currencies and 6.1 % in US dollars. However, due to the renewed weakness of the US dollar, the benchmark lost 2.6 % in euros in the first five months.

There were no places to hide in the Major Markets universe: All eighteen markets covered here lost ground in May. Sweden (-8.7 %), Singapore (-8.4 %) and Japan (-7.9 %) were the worst monthly performers, while Italy (-2.3 %), the USA (-3 %) and France (-3.8 %) lost least.

Year-to-date, seventeen markets advanced and only one market (Japan) declined. During the last five months, the best performing markets have been Norway (+14.3 %), Hong Kong (+6.8 %) and Australia (+6.2 %), while Japan (-2.1 %), Sweden (+1.1 %) and Switzerland (+1.5 %) have performed worst. All performance numbers are in local currencies unless mentioned otherwise.

The table below shows how the Major Markets Top Value Model Portfolio compares to the MSCI World Index as of the end of May:

There are no changes in Keppler’s performance ratings this month. The Top Value Model Portfolio contains Belgium, France, Germany, Hong Kong, Italy, the Netherlands and Singapore at equal weights. Keppler’s current ratings suggest that these markets offer the highest expectation of risk adjusted returns.

You can get ideas on shares in these top value major global stock markets from Thomas Fischer at Fischer@jyskebank.dk

For more details on Keppler's analysis, contact Roderick Cameron at 1-212-245-4304 or at roderick.cameron@kamny.com

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