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.
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