All four seeing consensus EPS downgrades. The four most overvaluedmarkets on our P/B vs ROE valuation model are India, Indonesia, thePhilippines and Malaysia, with Malaysia replacing Australia in the Expensive4 club in the June quarter. While historically markets tend to be overvaluedbecause of investors’ perception of structural growth and therefore the abilityto deliver on earnings, Figure 1 highlights that all four are associated withdowngrades to 2017E consensus EPS in August. Figures 4-5 and 7-8highlight 2017E consensus EPS cuts of 3.8% for India, 1.2% for Malaysia,0.8% for Indonesia and 0.2% for the Philippines in August.    These are not one-off EPS cuts either. While we have previouslyhighlighted three years of cuts to 2017E consensus EPS for India, wehighlight that August’s EPS cuts are not one-off for the other three as well(see Figures 3-5 and 7-8).    Reiterate Underweight on Expensive 4 club. While past performance is notnecessarily a good guide to the future, we highlight eight consecutive quartersof underperformance by the Expensive 4 club and YTD under-performancerising to 7.2% (Figure 6). Despite the underperformance, we reiterate theUnderweight call given valuations plus continued EPS downgrades.

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