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Philippines & Indonesia Had a High ‘Dream Factor’

#Philippines & #Indonesia Had a High ‘Dream Factor’ - #ChartOfTheDay


  • We consider five components of stock market return: Inflation, dividend yield, real book-value growth, share dilution and the “Dream Factor”
  • The “Dream Factor” could be thought of as the residual, the part of the market return that can’t be explained by the other four fundamental factors
  • “Dream Factor” is the portion of return driven only by re-rating of multiples
  • During bull markets, the “Dream Factor” is generally high but usually negative in bull markets and market crashes
  • Overall in Asia, on average during 2004-2016 (including the global financial crisis in 2008-2009) the “Dream Factor” did not contribute to return
  • In the two highest returning markets Indonesia and the Philippines, the “Dream Factor” contribution was also the highest


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