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When inflation and interest rates are low, Price per Earning (P/E) ratio tend to be-

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Question ajoutée par Fahd Mohammed Suleman , CFO , Tajeel Business Commercial Services
Date de publication: 2014/06/24
Vijay Kalpathy Ganapathy
par Vijay Kalpathy Ganapathy , Wealth Manager , Self Employed

While I agree that inflation has an impact on PE adversely to some extent one has to analyse the nature of inflation also. In case of cost push inflation I must admit that PE would be adversely effected across industries however if its a case of demand pushed inflation the story can be different. In such a scenario the companies performance could be better as a result investors may pay a premium for such industries. Again this is more economic than financial interpretation but that would be the way market would react.

Muhammad Fiaz
par Muhammad Fiaz , GROUP MANAGER ACCOUNTS, FINANCE AND TAX , SMPL Group of Companies

High

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