The economies are growing, the countries are developing, the prospects are rosy but the stock exchanges of the emerging markets continue to collapse infected by the distrust that is spreading in European markets and Wall Street. Undoubtedly the problem of inflation, like the appreciation of currencies, weigh on the choices of investors. But the reason for this financial slowdown is not to be found so much in the real economy, which also signals some slowdown.
In a moment of generalized losses, funds and investment banks such as hedge funds monetize the securities that have made them the most. And it is precisely the shares and bonds of emerging countries that have offered investors the greatest satisfaction in recent years. Unfortunately, however, now that everything is going wrong, they are also the first to pay the price.
Brazil – The Bovespa index has lost 25,67% since the beginning of the year, about half of which, 12,67%, in the last month alone. But if we consider the last 3 years, the Brazilian stock market is still in the green with a growth of 2,83% and would jump to +69,15% if we considered the last 5 years. To think that on Wednesday the Bovespa recorded the worst fall since November 2010, closing at -5,70%.
India – The Bombay Stock Exchange's Sensitive Index closed today with a loss of 2,35%. Since its highest peak last November, it has lost 22%, about 13% in the last month. Even the Indian Stock Exchange achieved an excellent long-term performance: if we look at the last three years we note that the Bses Index maintains its positive sign with an increase of 10,99%.
Russia -The Rts index, which was the strongest in all of Europe this year, reaching +10,8%, fell in recent weeks (approx. -20%) reflecting concerns about the slowdown in the global economy, is now losing 3,7%. The Micex, the Russian index denominated in rubles, lost (at 12 noon Moscow time) 3,1%, its largest loss in the last year.
China – The Shanghai SSE Composite lost 9,39% in the last month but still sees positive growth of 8,10% over the three years. Certainly the Chinese Central Bank has an influence, with its moves to fight inflation (since the beginning of the year it has increased interest rates three times and the percentage of required reserves of banks six times).
South Africa – South Africa is also not doing well on the stock market. Johannesburg's FTSE has lost 10,31% since January, but is still positive by 6,11% since last August.
Turkey – The Istanbul Stock Exchange lost 8% on Monday, August 7, recording the largest decline in the last three years. Today it lost 1,7% at around 14 pm. The ISE national 100, which includes the 100 largest companies in the country, lost 19% in the last month.
Data sources: Boursorama, Bloomberg
