Amid continued speculation about whether a global recovery has arrived, returns continue to show sto...
Amid continued speculation about whether a global recovery has arrived, returns continue to show stock specific impact on world markets.
Within the North American and Latin American markets, some of the smallest indices have racked up the highest returns from the start of the year through to 17 May. In sterling terms, the tiny Ecuadorian index has risen the highest over that time, up 42.26%, followed by Columbia, up 15.93%.
The larger index, Mexico's Bolsa, was also a top performer since the start of the year, up 14.40% in sterling terms. According to Bloomberg data, this was because of the performance of a handful of stocks, with the top five performing equities in the market returning well above 50%. Savia-A, an agrotechnology and finance company, which develops vegetable and fruit varieties and markets seeds and insurance products, is up 167.08% in sterling terms since the start of the year.
It is followed by the 104.10% returns of Grupo Industrial Saltillo-B, an auto, building materials and home products industries company. Natural resources group, Industrias Penoles completes the top three with returns of 102.17%.
The Peru and Canadian markets were the only other North American and Latin American countries that showed positive returns in sterling since the start of the year.
Steel and natural resource companies top the Canadian market, with Co-Steel up 207.55% in sterling terms from the end of December through to 17 May. It was followed by Kinross Gold, up 175.68% and medical technology company Ali Technologies, having risen 132.72%. Among those countries that have produced negative returns was the giant US S&P 500 index, down 4.01%, Argentina, which unsurprisingly is down 61.73%, Brazil, having fallen 15.65% and Venezuela, which was off by 14.40%. All figures are in sterling terms.
Standard Life Investments believes the debate about the outlook for equity markets remains as fierce as ever with some believing markets are still trapped in a bear phase and others saying that economic surveys are supportive of a recov- ery in equity markets and that profits are already improving.
Chief investment officer, Keith Skeoch, says: 'At face value, the markets may look as if they are expecting a double dip in the world economy. After all, the US economy grew almost 6% on an annualised basis in the first quarter, and retail sales and industrial production data for April suggest continued growth in the second quarter. Despite this, the equity market has been under severe pressure. This hardly represents a significant response by invest- ors to the unprecedented monetary easing by central bankers and the sizeable fiscal expansion now underway.'
Skeoch believes the main reason equity markets have been weak this year is the decline in a small number of high-tech and telecom-related stocks.
A notable gap has developed between the equity market indices including and excluding tech, media and telecom stocks. For example, in the UK, eight of the 10 main sectors are showing positive growth in the year to date, but the telecom and IT sectors are down 30%.
Smaller indices have performed well.
Second quarter has seen continued growth.
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