It appears that the countries with either the healthiest banking and financial systems, or strongest economic growth fundamentals, or large commodity complexes, or or all of the above, are enjoying a stronger recovery in equity markets than those with significant exposure to the current financial crisis that sank the G7 economies.
It looks as though global investors are focused on Canada as the standout from G7, with its strong financial system and significant commodity complex, despite its trade exposure to a crippled US consumer, and the BRICs with their strong consumer/producer pairings. All of the BRICs have sound fiscal positions, substantial forex reserves, many years of current accounts coverage, little or no direct exposure to the West's financial and credit crisis, and billions of underlevered consumers. There seems to also be a recognition of the comparative underindebtedness of emerging markets' companies and their resilient domestic consumption supports.
āWith global equity markets still in rally mode, below we highlight
the year to date performance of the major indices for 83 countries
around the world. After nearly every country was down earlier in the
year, 62 out of the 83 are now up in 2009.āPeru is up the most at 72.92%, while Costa Rica is down the most at
-39.94%. And the BRIC (Brazil, Russia, India, China) countries are
significantly outperforming the developed G-7 countries. Russia, India,
and China rank 2nd, 3rd, and 4th in terms of year to date performance,
and Brazil isnāt far behind in 10th place.āCanada has been the best performing G-7 country with a gain of
12.62% in 2009, but it ranks 35th out of 83. The rest of the G-7
countries are bunched up in the 0%-5% range, which is closer to the
bottom of the list than the top. And the US is the worst of the seven
with gains of less than 1%. While the markets here in the US have
rallied nicely off of their March lows, most other countries have
bounced back even more 2009.ā
Source: Bespoke, May 19, 2009.
