Emerging markets remain the flavour of choice going into 2007. And these charts from TickerSense illustrate just how strong a run they had last year. They list each country’s equity market return in 2006. Peru heads the list, followed by Venezuela, Vietnam, China, Russia, Costa Rica and Botswana.
The first western European market doesn’t feature until far, far down the list, with Norway at 29, Portugal at 30, and Luxembourg at 31.
In last year’s feverish bull run, who didn’t fare so well? Only four countries were down more than 20 per cent and they were the Middle Eastern markets of Saudi Arabia, UAE, Qatar and Jordan, caught as the oil price slipped from its previous highs.
Meanwhile, Lex wonders whether there is a breakdown in the traditional relationship between emerging market equities and bonds, where stock prices rise as sovereign spreads over US treasuries fall. It is important to note that in increasingly mature emerging economies the factors affecting the two asset classes are starting to decouple.
