Over the last decade, Romania and Slovenia have delivered returns at the very top of the global table, right alongside the NASDAQ 100, but without NASDAQ-style valuations, according to an analysis from Divo Pulitika, board member at asset manager InterCapital.
The figures registered over the last decade show a clear picture. Slovenia’s SBITOP, the main blue-chip index of the Ljubljana Stock Exchange, is up +498% over 10 years and roughly +53% year-to-date, trading near 11.6x price to earnings ratio, and with a dividend yield around 4.7%.
Romania’s BET-TR, the total return version of the Bucharest Exchange Trading index, which includes dividends, has compounded to about +385% over the decade and sits at roughly +28% year-to-date, at 10.7x earnings multiple and a 4.4% dividend yield.
NASDAQ 100, the US index tracking the largest non-financial companies listed on the NASDAQ Stock Market, with a strong concentration in technology, has delivered a 10-year return of about +436%, but trades at 33x earnings multiple and offers a dividend yield of just 0.7%.
The S&P 500 stands near +243% over the same period, at 25x earnings multiple and a 1.2% dividend yield.
“In other words, Slovenia and Romania have delivered long-run outcomes comparable to the NASDAQ 100, but with far lower headline multiples and materially higher dividend income. That valuation gap matters. At 10-12x earnings, the implied expectations embedded in prices for CEE equities are much more modest than for US large-cap tech. At the same time, dividend yields in the 4-5% range provide a tangible contribution to the total return that compounds through cycles,” the analysis notes.
Over ten years, EUR 1,000 invested back in 2015 in Slovenia’s bluechip index and assuming reinvested dividends, would be worth roughly EUR 6,000 today, about EUR 4,900 in Romania’s BET-TR, EUR 5,400 in the NASDAQ 100, and EUR 3,400 in the S&P 500.
Year-to-date, Slovenia sits near the top of the global YTD leaderboard, having registered a +53% appreciation (in EUR), while Romania is solidly positive, with the market increasing +28%, both outpacing most developed markets. Czechia, Greece, Hungary, and Poland also see solid growth levels, whereas many Western European equity markets have significantly lagged Eastern Europe in the past decade.
For example, Germany’s DAX has returned just over +110% in EUR terms over ten years, France’s CAC 40 about +138%, and the UK’s FTSE 100 roughly +62%.
(Photo source: BVB photo)
Leave a Reply