International equity market returns


Monthly Statistical Bulletin Feature Articles

Feature Article International equity market returns

In this Bulletin we report the Australian all ordinaries index declined 15.5 per cent over 2007-08. In this feature article we compare returns, highs and lows during the 2007-08 financial year in the Australian market with 19 international markets and a world benchmark—the Morgan Stanley Capital world Index (MSCI).1

Financial year 2008 returns

Comparing 30 June 2007 to 30 June 2008, Australia and 12 of the 19 markets declined, as did the MSCI. The Australian market fell 15.5 per cent while the MSCI lost 17.3 per cent. The worst decline occurred in Ireland at 44.0 per cent. The best gain was in Egypt at 22.9 per cent. All returns are summarised in the table below.

Peaks and troughs

During 2007-08, 17 markets and the MSCI reached decade highs in their share markets (peaks). Nevertheless, all of the markets ended the financial year below their peak, with much of the loss caused by issues emerging in the United States sub prime mortgage crisis. During the financial year 16 markets and the MSCI reached a low (trough), from which some recovery occurred by the end of the financial year. There are 5 markets where the end of financial year index value is lowest point for 2007-08.

The movement from peak to trough had different timing and impacts in each of the markets.

International equity market activity

 
Market Index
Market Timing
Returns over the period
   

Peak

Trough

Duration

FY08

Pk–Tr

Pk-endFY08

Tr-endFY08

   

Date

Date

Days

per cent

per cent

per cent

per cent

Australia

All Ordinaries

1 Nov 07

18 Mar 08

138

-15.5

-24.7

-22.2

3.3

Brazil

Bovespa

20 May 08

26 Jun 08

37

19.5

-13.0

-11.6

1.7

Canada

S&P/TSX CI

18 Oct 07

26 Jun 08

8

4.0

-5.2

-4.0

1.2

China

Shanghai ECI

16 Oct 07

30 Jun 08

258

-28.4

-55.1

-55.1

na

Egypt

Hermes

2 May 08

30 Jun 08

59

22.9

-17.1

-17.1

na

France

CAC40

1 Jun 07

27 Jun 08

392

-26.8

-28.7

-28.1

0.9

Germany

DAX40

24 Jul 07

25 Apr 08

276

-11.2

-16.3

-13.2

3.8

Hong Kong

Hang Seng

30 Oct 07

17 Mar 08

139

1.5

-33.4

-30.1

4.8

India

Sensex

8 Jan 08

30 Jun 08

174

-8.1

-35.5

-35.5

na

Indonesia

Jakarta MBX

11 Dec 07

9 Apr 08

120

0.8

-23.8

-21.0

3.7

Ireland

ISEQ

20 Feb 07

30 Jun 08

496

-44.0

-47.8

-47.8

na

Israel

TA100

31 Oct 07

17 Mar 08

138

-10.7

-25.6

-16.9

11.6

Japan

Nikkei 225

9 Jul 07

17 Mar 08

252

-25.7

-35.5

-26.2

14.4

Malaysia

KLCI

11 Jan 08

10 Mar 08

59

-12.4

-22.6

-21.7

1.1

Mexico

Bolsa

18 Oct 07

21 Jan 08

95

-5.6

-23.0

-10.5

16.3

Russia

RTSI

19 May 08

30 Jun 08

42

21.4

-7.4

-7.4

na

South Africa

FTSE/JSE

22 May 08

25 Jun 08

34

7.3

-9.8

-8.5

1.5

Thailand

SET100

29 Oct 07

24 Jan 08

87

-1.1

-23.0

-19.0

5.3

UK

FTSE100

15 Jun 07

17 Mar 08

276

-14.9

-19.6

-16.4

3.9

USA

DJIA

9 Oct 07

27 Jun 08

262

-15.4

-19.9

-19.9

na

World

MSCI

13 Jul 07

17 Mar 08

248

-17.3

-21.4

-19.3

2.7

Notes: Peak means the highest index level over the most recent ten financial years. Trough means the lowest index level since the peak. Duration measures the total calendar days (not trading days) between the peak and the trough. FY08 means financial year 2007-08. ‘Pk’ means peak and ‘Tr’ means trough. All indices are based on units of the countries domestic currency and exclude dividend reinvestment, only percentage movements are reported in this table.

Sources: Thomson Financial Datastream; Parliamentary Library

 

Although the timing of the peaks varies, nearly half of them occur between October and December 2007. The dates of the peaks and troughs are listed in the table below.

The longest period between the peak and trough (turnaround) was 496 days in Ireland. This may increase as the 30 June 2008 result was the 496th day. The shortest turnaround occurred in Canada at 8 days. The MSCI turnaround was 248 days, while Australia was 138 days. These timings do not include significant volatility within the financial year, only the peak to trough timing.

The decline between the peak and the trough in Australia was 24.7 per cent; the MSCI fell 21.4 per cent. China suffered the worst decline at 55.1 per cent, while Canada declined the least at 5.2 per cent. These losses may not have been realised. The movement from the peak to the end of financial year, and the trough to the end of the financial year is also summarised in the table for reference.

Monthly Statistical Bulletin Table 5.5

Table 5.5 shows recent monthly values of two Australian equity indices—the all ordinaries and the S&P/ASX200. It also includes commentary on recent market activity and information on the way the indices are formed.

Adrian Makeham-Kirchner

1. The MSCI index is an index based on 23 stock market indices and is regarded as a generic world market benchmark.

Back to top


Facebook LinkedIn Twitter Add | Email Print