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Wednesday, December 30, 2009

Brazil stocks top in 2009; Ukraine top bet in decade

LONDON — Reuters Published on Friday, Dec. 18, 2009 11:23AM EST

Brazil may have been the best bet for global equity investors in 2009 but it was Ukraine – in spite of the fractiousness of its political elite in recent years – that offered an unbeatable return of nearly 900 per cent over the decade, data compiled by Reuters show.

The former Soviet state was the best performing stock market in the world in the last 10 years, surging 890 per cent in dollar value, though 1999-2009 returns from government debt generally outstripped those generated by equities.

Along with Peru and Sri Lanka, Ukraine was also among the top 10 performing stock markets in 2009, a year that saw emerging equities more than double the gains of the MSCI main developed market index.

The best performing stock market in 2009 was Brazil whose Bovespa Index surged a blistering 145 per cent in dollar terms, fuelled in part by the 29 per cent rise in the value of its real currency versus the greenback.

Peru's Lima General Index ranked second best, with 120-per cent returns, followed by the Philippine SE Industrial Index – the second-best performing bourse in local-currency terms – with 118 per cent.

The dollar-denominated Russian RTS index was in fourth place, chalking up over 116 per cent, with Indonesian shares just trailing behind.

Buoyed by the ruble's four-per cent rise against the dollar this year, Russia's MICEX was the top performing index in local-currency terms, generating 113 per cent.

The end of a decade-long civil war in Sri Lanka in May saw the local-currency value of its main Colombo SE All-Share Index more than double over the course of the year.

Shares in Bahrain and Slovakia were the worst- performing globally in both local-currency and dollar terms, with losses of some 20 per cent.

Lost Decade

Norway offered the best returns within 10-year government debt in 2009, generating 25 per cent for the year, but those that bought U.S. bonds would have seen their investment shrink seven per cent during the year.

Ukraine's PFTS Index managed to double in dollar value in 2009 despite the economy's dependence on a $16.4-billion (U.S.) bailout program from the International Monetary Fund, now suspended over the inability of government leaders to take concerted action to meet its economic and financial obligations.

Over the decade, the market capitalization of the Ukrainian bourse has increased tenfold to $26-billion, fuelled by large-scale privatization of state assets and the explosion of new securities sales.

Peru was the second best performing bourse of the last 10 years, leaping 842 per cent, followed by Russia's RTS Index at 697 per cent and Romanian shares at 567 per cent.

On a 10-year basis, U.S. equity investors would have suffered the worst performance on record in what has come to be known as “the lost decade”.

Even in total return terms, investors in the S&P 500 Index would have lost 9.8 per cent since the end of December – in stark contrast to holders of 10-year U.S. bonds who would have seen returns of 84 per cent over the same period.


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