Global Leaders and Laggards

by: Vlada Kynsky

Right now we are in the middle of 2009, the year when most global stock markets are in recession. We are just about to kick off next releases for earnings season Q2. It is the right time to have a look to the performance of stock markets' indexes around the world and current valuations.

Since March 2009 we could see the rally but recently there are some signs of correction. Generally, the first half of 2009 was strong especially outside the US and other developed markets. Emerging markets end it around 35% up YTD vs. developed markets up almost 10%.

Here is the list of the best performing stock markets around the world. Mainly the BRIC region is in top.

India SENSEX Index 71%
Brazil BOVESPA Index 58%
Chile Stock Market Index 54%
China SSE Composite Index 47%

There are still some indexes with negative returns YTD like Germany, Switzerland, Poland. All of them are only slightly below 0%.

Lowest P/E ratio:
Venezuela 4
Cyprus 4
Russia 5
Malta 5
Luxemburg 7

Highest P/E ratio:
Japan 26
Taiwan 22
Slovenia 20
India 19
Mexico 16
Malaysia 16

The numbers show there is no clear answer which part of the market is overvaluated or undervaluated. Within the group of emerging markets there are countries with P/E ratio around 5 but also countries with valuations exceeding 20. The same applies for developed countries. Maybe one point can be recognized from the valuation. Generally Asian markets are seen in better condition and with a better outlook than European markets.