On the last trading day of 2019, we highlight the best and worst performing equity markets and FX rates as well as the most expensive and cheapest markets on trailing price/book and price/earnings versus history. We also provide hyperlinks to five of our most widely read equity strategy reports of this year. Best wishes for 2020!
It strikes us as extraordinary that the under-performance in 2019 and cheap value relative to history for both Bangladesh and Argentina is similar. In 2019, Bangladesh has seen continuing high GDP growth and stable FX rate, albeit with significant operational and regulatory challenges for its biggest stocks (all of which we regard as having now passed or fully reflected in valuation). On the other hand, Argentina has seen another FX rate collapse, another debt default and another election victory for the historically less market-friendly party. Argentinian exceptionalism again - ease of access (and exit) for foreign equity investors via its ADRs and a remarkably forgiving sovereign debt investor base!
Equity market performance
- Best equity market performers (up over 30% in US$ total return terms): EM Tech, Russia, Taiwan, Kenya, Romania, Bahrain, Kuwait, Jamaica, Colombia
- Worst equity market performers (down over 15% in US$ total return terms): Lebanon, Ghana, Argentina, Bangladesh, Nigeria
Equity market liquidity
- Most hyperactive (12 month ADV over 20% higher than 5 year ADV): China, MSCI EM, Tanzania, Jamaica, MSCI FEM, Bahrain, Brazil, India, Kuwait, Russia, Taiwan, Kazakhstan
- Most inactive (12 month ADV over 30% below 5 year ADV): Slovenia, Lebanon, Ghana, BRVM, Georgia, Pakistan, Dubai, Bangladesh, Tunisia, Ukraine, Jordan
FX rate performance
- Best FX rate appreciations (up 5% or more versus the US$): Ukraine, Russia, Egypt, Thailand, Indonesia, Tunisia
- Worst FX rate devaluations (down 5% or more versus the US$): Zimbabwe, Argentina, Lebanon (black market), Ghana, Turkey, Pakistan, Chile, Georgia, Mauritius, Hungary, Romania
Expensive equity markets
- Most expensively valued on price/book (25% or higher premium to 5-year median): Jamaica, Zimbabwe, Kazakhstan, Kenya, Brazil, Bahrain, Kuwait, Georgia, Morocco
- Most expensively valued on price/earnings (25% or higher premium to 5-year median): Zimbabwe, Lebanon, Jamaica, Bahrain, Korea, Taiwan, EM Tech
Cheap equity markets
- Cheapest on price/book (15% or greater discount to 5-year median): Ukraine, Sri Lanka, Lebanon, Oman, Bangladesh, Argentina, Pakistan, Dubai, Philippines, Iceland, Jordan, South Africa, Mexico
- Cheapest on price/earnings (15% or greater discount to 5-year median): Nigeria, Tanzania, Kazakhstan, Jordan, Ukraine, Egypt, Chile, Ghana, Poland, Mexico, South Africa, Bangladesh, Philippines, Colombia
Five of our most widely read equity strategy reports in 2019
(All of the data in the charts above is sourced from Bloomberg, as of 31st December 2019).