By Lachman Balani
TORONTO: Russia’s struggling economy and a pummeled ruble due to world economic sanctions surprised the world as its index MICEX outperformed all the main indices by advancing 26.12% in 2015!
It was to be another good year for the western world’s stock markets said the financial strategists at the outset of 2015. This was due to low oil, low interest rates and tame inflation they said, with even an RBC spokesperson giving the bold prediction that America’s S&P500 would close the year at 2325! Instead it closed at 2043.94 below its Dec 31, 2014 closing of 2058.90, a small loss of 14.96 points or virtually flat as it represents only a 0.72% loss.
Dow Jones, the most closely watch index of the world lost 2.23%. Nasdaq, the other closely watched bourse of the US actually gained 5.73%!
BRICS nations fared dismally except for China with Brazil losing 13.31%, India losing 5.1%, and South Africa losing 1.23%, even as China went up 9.41%.
Meanwhile in Canada, TSX suffered its worst year since 2011 losing 11.09%, one of the worst performing bourses of the developed world.
United Kingdom’s FTSE also suffered a loss of 4.93%.
Zones whose central banks are pursuing quantitative easing policies like Europe and Japan gained ground with Japan’s NIKKEI (+9.07%), Germany’s DAX (+9.55%) and France’s CAC (+8.53%) all up.
Shanghai as mentioned before is up 9.41% due to its expanding economy and government manipulation according to the mavens.
The interesting story about China is that Shanghai shot up from 3234 on Dec 31, 2014 to 5166 in June, 2015 (a meteoric rise of 59.74%) only to tumble in a short period to 2927 before regaining composure to close the year at 3539.18. A real wild ride!
Meanwhile the small but important Chinese enclave of Hong Kong saw its Hang Seng index lose 7.16%.
South Korea, whose brands LG, Samsung, Daewoo and Hyundai, to name a few, are slowly conquering the world saw its index, KOSPI, climb up modestly by 2.39%.
Many mavens claim that the shiny metal gold is coveted by about 6 billion people, i.e. the whole world except Western Europe, North America and Australia, as a way to hedge against the uncertainty of the future, yet it has lost ground by 10.37% from $1183 to $1060 per ounce.
Oil continued its downward slide from about $53 for West Texas Intermediate at the end of 2014 to $37 at the end of 2015, a loss of 28.07% taking down the Canadian dollar. Our sweet candy is now worth only 72.2 US cents compared to about 86 US cents a year ago, a drop of 16.28%!
The US dollar has also strengthened against other currencies, including the pound (going from USD1.56 to USD1.48 or a loss of 5.13% for the pound) and the Euro (from USD 1.21 to USD 1.09 or down 9.92% for the Euro) and marginally against the Japanese yen (from Yen 119 to YEN 120 to the USD or down 0.8% or flat essentially). The mighty buck has consolidated its strength from last year’s strong rise and is expected to cement its position even more this year.
Here are how 15 of the world’s most watched bourses fared in 2015.
BOURSE Dec 2015 Dec 2014 % change
MICEX (Russia) 1761.36 1396.61 +26.12%
DAX (Germany) 10743.01 9805.55 +9.55%
Shanghai (China) 3539.18 3234.68 +9.41%
Nikkei (Japan) 19033.71 17450.77 +9.01%
CAC (France) 4637.06 4272.75 +8.53%
Nasdaq (USA) 5007.41 4736.05 +5.73%
KOSPI (S Korea) 1961.31 1915.59 +2.39%
S&P500 (USA) 2053.94 2058.90 -0.72%
South Africa 49159.77 49770.60 -1.23%
Dow Jones 17425.03 17823.07 -2.23%
FTSE (UK) 6242.32 6566.09 -4.93%
BSE (India) 26117.54 27507.24 -5.1%
Hang Seng (HK) 21914.40 23605.04 -7.16%
TSX (Canada) 13009.95 14632.44 -11.09%
Bovespa (Brazil) 43349.96 50007.41 -13.31%