Q1 Global Stock Market Performance in Review

By: Prieur du Plessis | Thu, Apr 1, 2010
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Sitting a stone's throw from the turquoise Caribbean sea in Santo Domingo (see Gone A.W.O.L - lite blogging and full planes), I nevertheless managed to compile a summary of the movements of major global stock markets for the past quarter and various other measurement periods.

It is 3 o'clock in the morning in this neck of the woods as I battle the time difference to catch up with my office in Cape Town (where it is 9:00). My comments will therefore be brief.

Benchmark indices such as the S&P 500 Index recorded the best quarter since 1998 on the back of improved sentiment as the global economy turning the corner emboldened investors to adopt more risk. For the quarter, the MSCI World Index gained 2.7% and the MSCI Emerging Markets Index 2.1%.

The major US indices, now up for four consecutive quarters, outperformed the broad global indices with both the Dow Jones Industrial Index and the S&P 500 Index returning almost 5%. Running even harder, the small-cap Russell 2000 Index - the leading US index since the lows of March 2009 - gained 8.5%.

In stark contrast with most other stock markets, the Shanghai Composite Index was under water for the quarter with a loss of 6.7%. This underperformance (also seen in a decline of 3.0% in the Hong Kong Hang Seng Index) is noteworthy as Chinese stocks led global markets higher at the bottom and raises concerns that the same could be happening on the way down.

Notwithstanding the excellent quarter and solid rally since the March lows, only the Chile Stock Market General Index and the Mexico Bolsa Index have been able to reclaim their 2007 pre-crisis peaks and are now respectively trading 7.5% and 1.3% higher. Israel could be the next country to eliminate its bear market losses. The Dow Jones Industrial Index and the S&P 500 Index still need to rise 30.5% and 33.8% respectively to reach their October 2007 bull market peaks.

Golbal Stock Markets: Index Movements in Local Currency

According to Emerginvest, top performers among the entire spectrum of stock markets this week were Estonia (+44.7%), Kenya (+26.0%), Bangladesh (+25.6%), Lithuania (+22.7%) and Nigeria (+22.4%). At the bottom end of the performance rankings, countries included Bermuda (-32.2%), Nepal (-11.8%), Slovakia (-8.2%), Cyprus (-7.8%) and Spain (-7.6%).

A handy visual quarterly review is also provided by Brain Shannon (Alphatrends.net). Please click on the image below to hear his thoughts.

Source: Alphatrends.net, March 31, 2010.

Although it was a strong quarter for most stock markets, the closing day was less rosy. Time will tell whether this is a precursor of weaker performance ahead as we enter April - the last month of the so-called "best six months of the year" before the start of the traditionally weaker May-October period.

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Prieur du Plessis

Author: Prieur du Plessis

Dr Prieur du Plessis

Dr Prieur du Plessis

With 25 years' experience in investment research and portfolio management, Dr Prieur du Plessis is one of the most experienced and well-known investment professionals in South Africa. More than 1 000 of his articles on investment-related topics have been published in various regular newspaper, journal and Internet columns. He also published a book, Financial Basics: Investment, in 2002.

He holds the following degrees: BSc (Quantity Surveying) (Cape Town), HonsB (B & A) (cum laude) (Stellenbosch), MBA (cum laude) (Stellenbosch); and DBA (Doctor of Financial Management) (Stellenbosch).

Prieur is chairman of the Plexus group of companies, which he founded in 1995. Previously he was general manager: portfolio management at Sanlam, responsible for the management of investment portfolios with total assets in excess of $5 billion.

Plexus is a pioneer in the mutual fund industry and has achieved a number of firsts under Prieur's leadership. These include the authoritative Plexus Survey, a quarterly analysis of the consistency of the performance of unit trust management companies, the Plexus Offshore Survey, the Plexus Unit Trust Indices, and the PlexCrown Fund Ratings.

Plexus is the South African partner of John Mauldin, American author of the most widely distributed investment newsletter in the world, and also has an exclusive licensing agreement with California-based Research Affiliates for managing and distributing its enhanced Fundamental Index™ methodology in the Pan-African area.

In 2001 Prieur received the Santam/AHI Business Leader of the Year award for corporate leadership, business acumen and entrepreneurial flair. He was also profiled in the book South Africa's Leading Managers (2006). Plexus received the AHI/Old Mutual Enterprise of the Year award in 1997 and was also included in the book South Africa's Most Promising Companies (2005).

Prieur is 52 years old and lives with his wife, TV producer and presenter Isabel Verwey, and two children in Welgemoed, Cape Town. His recreational activities include long-distance running, motor cycling and reading. He belongs to the Cape Town Club, Johannesburg Country Club, Gordon's Bay Yacht Club and Swiss Social & Sports Club.

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