Why Colombia's Stock Market Beat China's
If you had any doubt about what Fareed Zakaria calls "the rise of the rest," consider a new Bank of America Merrill Lynch report on the performance of emerging markets over the past decade. If you had invested $100 in -emerging-market stocks on Dec. 31, 1999, you'd have $262 today, while $100 invested in the S&P would be worth $91.
The most surprising thing about the study: tiny Colombia tops the list of performers, with a 1,529 percent return over the past decade. That's basically a commodities story (the South American nation is rich in coal, copper, and gold), and indeed, the huge global demand for everything from oil to minerals to agricultural crops (due itself in large part of the rise of developing nations) has made numerous poor nations richer in recent years.
An even bigger surprise is that BRIC darling China actually underperformed its peers, rising only 150 percent compared with energy-rich Brazil (520 percent) and Russia (326 percent) or well-regulated India (274 percent), which some investors see as a safer and more diverse bet compared with the Chinese equity market, which is dominated by bank stocks.
Bank of America Merrill Lynch equity strategist Michael Penn predicts all these markets, as well as others like South Africa, will surge ahead in 2010 on the back of new infrastructure development and a growing middle class. "Emerging-market consumers are only just at the beginning of their credit cycle," says Penn. That means they have plenty left to spend.
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Rana Foroohar is the deputy editor in charge of international business and economics coverage for Newsweek. She conceives and edits a weekly section of breaking news stories, features and guest articles. She also writes economic cover stories and opinion pieces, and pens a bi-weekly column on the global economy.
Foroohar oversees Newsweek's team of global correspondents and stringers, directing their reporting on the week's business news. She edits regular columnists such as hedge fund manager Barton Biggs, Morgan Stanley emerging markets head Ruchir Sharma, Yale professor Jeffrey Garten and PIMCO CEO Mohamed El-Erian. She is in charge of economic coverage for Newsweek's annual Davos special issue, which features pieces by world leaders and economic thinkers, and also chairs panel discussions while at the World Economic Forum in Davos.
Prior to taking this New York based position in 2007, Foroohar spent six years as Newsweek's European Economic Correspondent based in London, covering Europe and the Middle East. During this time, she was awarded the German Marshall Fund's Peter R. Weitz Prize for transatlantic reporting. She has also worked as a general editor at Newsweek, a reporter for Forbes magazine, and as a writer and editor at various other national and international publications. Foroohar graduated in 1992 from Barnard College, Columbia University, with a B.A. in English literature. She is a life member of the Council on Foreign Relations.
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