Global Markets' Performance

1 Month Best Returns ending 30 June 2008

Argentina +9.6%
Czech Republic +2.6%
Morocco -0.02%
Indonesia -2.0%
Canada -3.7%
Peru -4.1%
Switzerland -4.9%
UK -6.3%
Japan -6.7%
Australia-6.7%
Singapore -7.7%
Germany -7.8%
Malaysia -8.05%
US -8.13%
HK -10.8%
Thailand -11.2%
South Korea -11.3%
China -12.4%
Taiwan -12.7%
NZ -13.4%
Philippines -14.9%
India -20.11%

If we look at the 1 month return ended June, its obvious the ones really struggling with inflationary expectations and a high interest rate level already are getting whacked greater. The reverse was also largely true of course.

3 Month Returns Ended 30 June 2008
Argentina +26.75%
Brazil +18.65%
Russia +10.2%
Canada +9.8%
Australia +3.9%
Japan +2.0%
Singapore 0.1%
Germany -1.1%
UK -1.3%
US -1.5%
Indonesia -2.06%
Morocco -2.08%
China -3.07%
South Korea -6.2%
Malaysia -7.05%
Thailand -10.9%
NZ -11.7%
Taiwan -12%
India -19.3%
Philippines -22.6%

On a 3 month basis, the excitement was with resource rich nations judging from the top 5 performers. The selling has still been largely in those countries struggling with high real interest rates and even higher inflationary expectations. That being the case, with a downtrending commodity prices, would the performers going forward change?

A serious downtrend in commodity prices will spur equities globally. However, those struggling with a high BLR e.g. 7% or higher will find its equity markets harder to perform as returns will be judged against returns from equity. That being the case, good dividend yield markets with a correspondingly low BLR and a largely containable inflation rate of 5% or below, and a strong currency outlook will be favoured:
Argentina
Brazil
Singapore
HK
Malaysia
Japan
US