Lanka ranked second in stock market performances

Sri Lanka has been ranked second in stock market performances this year, South Korea based Samsung Securities said yesterday.

Russia topped the list as its benchmark index jumped 121 percent this year, a sharp turnaround from a 72.4 percent drop in 2008. Sri Lanka came in second with a 114.6 percent growth, followed by Argentina at 105.1 percent and Brazil at 84.6 percent, China at 79.8 percent and India at 79.1 percent.

In general, emerging markets have outperformed developed ones as increasingly risk-averse global investors put more money into shares and other assets in developing countries on the back of the easing of the international financial debacle.

They borrowed money from the US and other crisis-hit advanced countries with low interest rates to buy stocks in emerging markets for larger returns, the South Korean media reported.

The US and other advanced countries posted a relatively sluggish upturn this year, weighed down by high unemployment and other continued unfavourable economic conditions.

The Morgan Stanley Capital International (MSCI) index for 22 developing economies increased 56.4 percent in 2009, but the index for 23 advanced countries rose at a slower rate of 20.9 percent.

A Samsung Securities analyst said despite a substantial rebound from their lows in late 2008, emerging markets have yet to reach their highest level, which was set in 2007, adding that advanced markets are still 25 percent lower, compared to their 2007 highs.

Meanwhile data compiled by Reuters also put Sri Lanka among the top 10 performing stock markets in 2009. In the Reuters data, Russia was the best performing stock market in the world in the last 10 years, surging 890 percent in dollar value, though 1999-2009 returns from government debt generally outstripped those generated by equities.