Global Equity Markets Surge to a Five-Year High

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Global stock market performance has climbed to a five-year high with the best returns coming from the Asia-Pacific.

Over 80% of markets tracked in 39 different countries have seen equity returns rise in the past 12 months, according to data from Lloyds TSB International, www.lloydstsb-offshore.com.

The leader is Thailand – with a 42% increase year-on-year followed by Denmark (35%) and the Philippines (34%).

US equity prices increased 23% over the same period, while the UK was up 12%, just 1% over the global average.

The worst performing markets over the past year were Slovakia (-15%), China (-12%) and Spain (-10%).

Emerging economies are top performers

Emerging economies produced the best performing stock markets over the past 10 years, the survey found.

Indonesian equity prices showed the biggest increase (917%). This was 17 times the increase in UK equity prices (54%). Brazil (586%) had the second biggest rise, followed by India (567%) and the Philippines (373%).

Equity prices have fallen in two of the 39 countries tracked over the past decade – Greece at -60%,  and Japan (-5%).

Finland (5%), the Netherlands (19%) and France (21%) returned the smallest rises.

The league of best performing equity markets matched the countries with the fastest growing economies.

GDP has increased on average by 201% in the 10 countries with the biggest rises in equity prices since 2002, more than three times the average 64% rise in GDP in the 10 countries with the worst stock market performance.

Eurozone crisis hinders markets

Increasing Indonesian equity prices over the past decade partly reflects the 355% rise in GDP in the country over the same period.

Suren Thiru, economist at Lloyds TSB International, said: “It is encouraging that equity performance has improved across a number of countries over the past year, although much of this increase was from a relatively low base following the sharp falls recorded in 2011.

“Over the past decade, equity price performance has generally been stronger in the countries with the fastest growing economies. The top performing stock markets are primarily in emerging markets economies, which have benefited from rapid economic growth compared with more developed nations.

“Looking forward, the outlook for global equity prices is likely to be driven by the extent to which world economic recovery continues as well as the impact of the ongoing problems in the eurozone.”

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