Investing April 2, 2002

March Madness as World Markets Rebound

April 4, 2002 (PLANSPONSOR.com) - Global equity markets bounced back, the FTSE All-World index gaining 4.3% in March, from the lows of the early months of 2002, bolstered by a series of economic data releases pointing to a nascent recovery.
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Hopes were raised that corporate profits would soon rebound and most markets returned positively over the month.

In US dollar terms, Russia was the best performing market, the market increasing by 19.18% supported by the surge in oil prices and an improving economic outlook.

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Elsewhere in the Europe-Middle East-Africa region, Turkey increased by 11.38% on the hopes that an IMF program would curb the country’s inflation.

Markets in the Middle East continued to be affected by the ongoing upheaval there, Israel, India and Pakistan all posting negative returns over the month.

In Latin America, Argentina topped the performance charts in local currency terms as the peso plummeted. Many local investors added support to the market by using equities as a hedge against the declining currency, according to FTSE.

However, in dollar terms Argentina’s performance was abysmal, down 12% due in part to the poor performance of telecom Argentina, which fell by 42.2%.

Over the month, the worst performer in local currency was Venezuela where the stability of President Chavez’s government remains questionable.

Asian markets were largely positive, with Japan increasing 5% following government restrictions on short-selling.

Markets in Taiwan and Korea rose 8% and 9% respectively as demand for semiconductors recovered. Taiwan’s Vanguard Int. Semiconductor, was the month’s best performing stock, rallying 75.7%. Korea’s Samsung SDI, up 67.4%, also made the top five list.

Sector Bets

Over the month, the best-performing sectors were:

  • Gas distribuition, up 8.8%
  • Information Technology Hardware, up 8.3%
  • Electronic and Electrical Equipment, which increased by 8.2%.

At the other extreme, the worst performers were:

  • Pharmaceuticals, edging down -0.7%
  • Forestry and Paper, inching up by 0.1%
  • Steel and Other Metals, up a meager 0.3%.

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