In CY10, frontier markets, in aggregate, performed better than developed & emerging markets.
| | 3MTD* | CY10 |
| MSCI World Index | 6.8% | 8.6% |
| MSCI Emerging Market Index | 5.2% | 14.9% |
| MSCI Frontier Market Index | 5.3% | 19.0% |
| *13 Oct 2010-13 Jan 2011 | ||
| Source: MSCI |
I have ranked countries by their performance in equity market, during past 3 months. Interestingly, Top 4 countries equity performance in past 3 months belongs to MSCI Frontier Markets & 10 out of top 15 countries in the world, also belongs to MSCI Frontier Markets .
Pakistan’s equity market performed really well in the past 3 months, ranked 3rd in the world.
| Rank | MSCI Country Index | 3MTD* |
| 1 | UKRAINE | 38.0% |
| 2 | KAZAKHSTAN | 22.6% |
| 3 | PAKISTAN | 20.8% |
| 4 | QATAR | 17.4% |
| 5 | RUSSIA | 17.0% |
| 6 | KOREA | 15.2% |
| 7 | TAIWAN | 15.2% |
| 8 | SERBIA | 14.8% |
| 9 | NIGERIA | 14.6% |
| 10 | CROATIA | 13.6% |
| 11 | ESTONIA | 12.8% |
| 12 | JAPAN | 12.2% |
| 13 | OMAN | 11.3% |
| 14 | VIETNAM | 10.0% |
| 15 | USA | 8.6% |
| *13 Oct 2010-13 Jan 2011 |
| Source: MSCI |
Now, ready for big surprise….
Pakistan’s equity market performed the highest in 3MTD & YTD in Asia & Pacific region, in comparison to developed, emerging & frontier markets.
| MSCI Indices | YTD* | 3MTD** |
| FRONTIER MARKET INDEX | 1.6% | 5.3% |
| FRONTIER MARKET ASIA INDEX | -2.2% | 4.0% |
| BANGLADESH | -8.9% | -7.9% |
| PAKISTAN | 5.3% | 20.8% |
| SRI LANKA | 1.9% | 1.3% |
| VIETNAM | -0.5% | 10.0% |
| EMERGING MARKET INDEX | 1.0% | 5.2% |
| EMERGING ASIA INDEX | 1.2% | 5.4% |
| CHINA | 4.1% | 0.9% |
| INDIA | -7.4% | -6.9% |
| INDONESIA | -5.7% | -9.1% |
| KOREA | 3.7% | 15.2% |
| MALAYSIA | 5.0% | 6.8% |
| PHILIPPINES | -3.4% | -8.5% |
| TAIWAN | 0.8% | 15.2% |
| THAILAND | -0.1% | 3.8% |
| WORLD INDEX | 2.0% | 6.8% |
| PACIFIC INDEX | 1.4% | 9.3% |
| AUSTRALIA | -1.7% | 4.2% |
| HONG KONG | 5.0% | 7.3% |
| JAPAN | 2.2% | 12.2% |
| NEW ZEALAND | 2.2% | 6.0% |
| SINGAPORE | 1.9% | 4.8% |
| *1 Jan 2011-13 Jan 2011 **13 Oct 2010-13 Jan 2011 |
| Source: MSCI |
The main reason for the Pakistan’s performance & continued foreign interest which specially surge in 3MTD is due to Pakistan’s cheap valuation.
Pakistan’s valuation is the cheapest in Asia region [Bloomberg, 13 Jan 2011]
Another phenomena, which i have noticed in countries belong to frontier market is, macro events can have disproportionate effect on performance of index/ earnings of blue chip companies.
