Some countries have low P/E ratio, while other, by contrast, high. But this does not mean, that some countries are more attractive for investors, then other. So this simple compare may be useless. Actually, countries have different P/E ratios, but also they have different interest rates.
Let's follow the "FED" model. This comparison is more adequate. So, P/E ~ 1/r, where r is 10 year Government Bond yield. Or (P/E)*r=k, where k is adjustment coefficient. In general, Lower k may indicate cheaper equity market (under-priced or troubled). At least, lower k (k<1) means that stock price is less then it's theoretical value.
