Stock Market Performance of Russia

Emerging markets such as BRIC countries, Countries in Africa provide an excellent ground to test standard models of the developed markets or explore the specifics of their financial environment. Such models help us in gauging the return one can expect for the attached risk premium. We would like to highlight and discuss the performance of one such emerging market Russia today.

Over the last one year Russian Stock Market is down 22.22% from the levels of 1800 (12-Jan-2011) to the levels of 1400 (10-Jan-2012) as on date. Its down 43.5% from its all time high of 2478 made on 12-May-2008. The markets are still 1000 points away from its all time high. A comparison with Crude Oil charts does reflect a close correlation with Stock Market performance for Russia. As Crude rises its indices go up. With Crude looking to stabilize at around 100$ barrels with most analysts pointing towards the end of the boom in commodities, Russia will have to come up with new economic sectors which attracts investors and enable companies to raise capital through the markets.

Like other emerging markets Russia exhibits High Concentration and Low Liquidity which creates a vacuum when a investor with big position is switching from one stock to another. This is a nature of emerging markets and gets addressed as new companies get listed on the market leading to increase in market cap and offering new opportunities for the investors to gain from the increasing depth.

World Stock Market Performance in New Year 2012

Index Name	30-Dec-11	6-Jan-12	Change	In %
Dow Jones	12260	12351	91	0.742251
Nasdaq	2609	2673	64	2.453047
Nikkei	8357	8390	33	0.394879
Kospi	1826	1825	-1	-0.05476
Hangseng	18755	18488	-267	-1.42362
Shanghai	2182	2220	38	1.741522
S&P 500	1260	1277	17	1.349206
CAC	3162	3134	-28	-0.88552
DAX	5909	6054	145	2.453884
FTSE	5628	5643	15	0.266525
Sensex	15702	15771	69	0.439434

*Above Pie Chart is a reflection of this chart.

Stock Market Performance over the first week of the new year 2012 is not much convincing with clear directions of upward or downward bias not clear. While Dow Jones was Flat, NASDAQ showed better performance with 2% gain over the week. Shanghai, DAX, S&P 500 and Asian market closed with positive bias with CAC and Kospi closing with negative bias.

Markets worldwide are likely to show a disconnect among themselves with US showing flat to negative performance and Europe completing there bottoming out process during this month. Europe will exhibit good volatility as it strives to solves the deficit issues of its countries in the first half. Do expect a lot of see-saw there though. Financials and companies with high debt are likely to make new bottoms, a technical rally than should bring some sanity. Though remember NO BOTTOM IS GOOD ENOUGH. Gold and US Dollar will be safer investments during this time.

World Stock Market Performance in 2011

Note: Above returns have been calculated by normalizing the value at 0% at the start of 2011.

Taking a peak at the Stock Market performance for the year 2011 gives us two intriguing facts, First that US markets have been outperforming for last two years when the businesses there have been showing bad signs and employment figures not anywhere convincing. Second that Asia(including Japan) as a basket has under performed in a  big way. 

A cue one can take from the markets is that US has probably had its fair share of returns due to its severe under performance at the time of recession and one can look at Asia given there share of under performance over the last two years. Bounce back from lows is a known fact and while picture is becoming rosy in US with good employment figures doing the rounds, it already priced in by the US markets.

A investor can now look at Japan and Asia in 2012 and expect good returns, while they are expected to under perform in the first 3 months to complete the bottoming out process, good returns can be expected from April on wards.

Stock Markets in 2012

2012, the Mayan year of doom is here. With the last year behind us, most of the people who have been investing in the stock markets have only burned fingers. With the exception of few IPO's such as the one of LinkedIn on NYSE others have not met the expectation of investor returns. There are a lot of expectations from  the upcoming IPO of Zynga and Facebook itself. While investors can expect first day gains on both of them, sanity will prevail once the number crunching of there financials start. While Facebook and Zynga IPO's will not leave much on the table for investors until you have 5 Year time horizon to see a 100Billion$ market cap of Facebook at IPO to reach 250-300 Billion$ valuation. It will be a tough ask even for Facebook to do it with number one site on the net Google still at a valuation of 209Billion$ (as on 2nd Jan-2012). Well my guess is that internet reach will have to double from here if Facebook valuation of 100Billion$ is going anywhere from what they are expecting. Lets hope Investors have learned lessons from 2000's tech boom and from 2008.

Well this year can certainly be called Year of Facebook in the stock markets, whether it will be bust or boom will be there for everyone to see. Risks on the "Facebook Wall" are very high with returns way down the road.

I hope with a bit of research anyone can find a better company to give them 25-30% returns in 2012.

Welcome to the Blog!

Hi All,

Welcome to Shares Price Blog. My name is Rohit Jain and I have been investing in the Indian Share Market from the time I completed my graduation, that is from the year 2004. 

I started investing from the early stages of the Boom cycle and have seen the bust cycle panning out as well. While it stays challenging to invest in both markets as we try to beat everyone else in the run to maximize returns on our capital, a individual who is a pure investor is able to keep his calm through boom and bust cycles.

I will be suggesting stocks on the blog with my views on the World Stock Markets.

Wishing you All A Very Happy New Year 2012 and Happy Investing !!!