Slovenian stock market may be peaking

"The Slovenian stock rally has made the equity market of the former Yugoslav republic more expensive than China's. Now investors say it's time to sell.

'We are gradually reducing Slovenian shares because the market feels hot,' said Jernej Kozlevcar, a manager at Triglav Asset Management in the capital, Ljubljana. 'Recent growth of the market is mainly based on speculation about consolidation and less on business results.'

The Slovene Stock Exchange index, known as the SBI20, was the best-performing equity benchmark in the world last quarter, jumping 39 percent in dollar terms, according to data compiled by Bloomberg. It has more than quadrupled since the end of 2002, paced by Petrol, the largest Slovenian refiner and retailer of petroleum products, and Intereuropa, a logistics company.

Companies in the index trade at an average of 38.9 times estimated earnings, more than twice as much as their average for the past year. The price/earnings ratio is also more than double that of the Morgan Stanley Capital International Emerging Markets index, a global gauge for developing economies. Members of the CSI 300 index in China trade at 32.9 times earnings."

Source: International Herald Tribune