Tuesday, September 07, 2010

Country Equity Markets' Performance YTD

Global stock market country's performance on a year to date basis yielded some interesting observations. The respected Bespoke Investment Group has featured the table below recently. The average year to date change for all 82 countries is 5.39%.

The S&P 500's year to date change of -1.24% is obviously below both of these. The US currently ranks 53rd out of 82 in terms of 2010 performance.

At the top of the list is Sri Lanka with a 2010 gain of 73.69%. Bangladesh ranks second at 49.37%, followed by Estonia 41.94%, Ukraine 40.86%, and Latvia 40.26%.

The bigger emerging markets have not fared so well. India has been the best performing BRIC country so far this year with a gain of 4.33%. Russia ranks second at 1.42%, Brazil ranks third at -2.43%, and China is down the most at -18.97%.

The developed markets have also fared poorly so far. Canada is currently the top G7 country with a gain of 3.26%. Germany and Britain are the other two G7 countries that are up year to date but only just, while Japan is the G7 country that is down the most year to date (-13.58%).


Overall, Bermuda has seen the biggest losses this year with a decline of 38.25%. Greece is the second worst at -24.56%.

It looks like the flow of funds indicate a benign investing environment for the bigger markets, be it emerging or developed. Its still a tug of war, a delicate balance between the bulls and the bears. To break it down, its torn between the group that thinks that most of the developed nations may still be in for a double dip or that the stimulus programs have run its course. The other group thinks that there is still immense liquidity staying on the sidelines which may flow back into equities in a big way this year.


I am in the latter camp. To me, if you think there is the likelihood of a double dip, it will still translate to a low interest rate environment or that more stimulus will be offered. Both still bullish factors.

If there is no double dip, some of the liquidity will move back to equities to get better returns. Hence it is a inherently better to be long and bullish on stocks for the rest of the year.

Malaysia, together with Thailand and Indonesia have done very well, notching 12.8%, 26.6% and 24.8% respectively.


The other fact which I find comforting is that markets are not ignorant, they have penalised Japan and China markets heavily so far this year. Japan, for further aggravating their deflationary economy. China for having to continue to tighten the taps to control over exuberance in property and indiscriminate lending.

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