The best - and worst-performing stock markets in 2019

The general performance of markets was better this year. Tom Bailey names the winners and losers. 

The best-performing market in 2019 was Russia, which saw a market return of 39.2%, at the time of writing in mid-December.

The recovery of oil prices undoubtably helped the index, alongside a thawing in geopolitical tensions between the country and the west.

At the same time, Russia’s been on a path of fiscal loosening, with the central bank cutting rates in October. As Aneeka Gupta, an equity and commodity strategist at WisdomTree had previously told Money Observer:

“Russian policy makers appear to be placing more weight on economic growth rather than financial stability, and we expect both fiscal and monetary policy to contribute to their growth objective.”

At the same time, there has continued to be a growing perception of Russian equities as more shareholder friendly, with companies such as Sberbank (LSE:SBER) and Gazprom (LSE:OGZD) delivering generous dividend payouts. This has helped make Russia a more attractive market. 

Jose Garcia Zarate associate director of passive strategies and manager research in Europe, however, warns about Russia’s volatility. He says: “The Russian equity market is notoriously volatile and significantly less liquid than many of its emerging market peers.

“This means that increases in demand such as this year’s lead to comparatively higher increases in prices, but by the same token the downside in prices is typically higher when the tables turn.” 

Russia’s strong performance this year has helped to keep our new Global Value Portfolio afloat. However, as we pointed out in our latest portfolio update, the Russian market is still, by international standards, very cheap.

Number two on the list was Greece, which returned 37.8%. The country continued to see an improvement in the country’s risk perception among investors, with the yield on 10-year government bonds now sitting at 1.32%.

The country, however, received an extra boost in market sentiment with the successful election of the centre-right New Democracy Party. While the left-wing Syriza was no longer viewed as the threat to markets it was in 2015, investors clearly felt that New Democracy was a safer pair of hands.

Source: Morningstar

Zarate points out:

“Banking stocks have been amongst the best performers, as investors see progress in the recapitalisation of the domestic banking system.”

Ireland was also a strong performer, adding 24.9%. According to Zarate: “[This is] perhaps surprisingly so given that 2019 has been a rollercoaster of Brexit emotions and Ireland is the country most exposed to that particular risk.

“Still, the Irish stock market has had a strong bull run in fourth quarter.  No prizes for guessing that the clinching of a revised withdrawal deal between the EU and the UK must have been the key factor.”

Chile topped the table for the worst performers, down 20.5%. Zarate points to the recent protests against the government’s economic policies. He argues that there is now a fear among international investors that in response to the protests Chile may start pursuing the sort of protectionist and anti-business policies practiced by some of the other country’s in region.  

Poland also saw significant losses primarily due to the poor performance of banking stocks. Zarate says:

“There are concerns about potential recapitalisation needs due to court rulings on foreign-currency mortgages.”

Compared to last year, the general performance of markets was better. For instance, all of the top 10 markets had returns in double digit territory in 2019, with the smallest returns among the top 10 being Denmark’s 18.7%.

Meanwhile, some of those included in the bottom 10 in 2019 had losses of less than 1%, such as South Africa and the United Arab Emirates. In contrast, “best” performance among the worst performing markets in 2018 came from Mexico, with a loss of 11.2%.

Source: Morningstar

All indices Net Return (NR), with minimum possible dividend reinvestment.  

Full performance can be found on the company or index summary page on the interactive investor website. Simply click on the company's or index name highlighted in the article.