Most global markets have seen significant derating (term used for lowering of valuations or price-to-earnings, or P/E, multiples) this year amid hardening bond yields, following rate tightening by central banks to cool inflation.
Equity markets may once again rerate (term used for expanding of valuations or higher P/E multiples) once central banks start slacken their tight monetary stance.
However, this is unlikely to play out until the second half of 2023, says Credit Suisse in its Investment Outlook 2023 report.
"The higher-rates-for-longer theme triggered significant derating of equities in 2022. This theme will likely continue to dominate during the first half of 2023, leading to muted equity performance. Sectors and regions with stable earnings, low leverage, and pricing power should fare better in this environment," says the report.
This story is from the November 28, 2022 edition of Business Standard.
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This story is from the November 28, 2022 edition of Business Standard.
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