Emerging stocks lose again in November

December 2, 2013

By Shadi Bushra

After years of basking in their reputation as high-return hot spots, 2013 could be the year emerging equity markets finally lost their magic touch. Last month continued the litany of losses — seventeen of the 20 emerging markets listed on S&P Dow Jones indices ended November in the red, the index provider says. Contrast that with developed markets’ fortunes last month– 18 of the markets listed by the index rose, while eight fell.

So last month’s scores: Emerging stocks — down 2 percent; Developed stocks — up 1.6 percent. And for 2013 as a whole, emerging stocks are down 3 percent while developed markets are up a whopping 22 percent, approaching their 2007 peaks, according to S&P Dow Jones.

While each of the emerging market countries has their own unique cauldron of political and economic issues affecting their stocks’ performance, there is common ground too — the expected tapering of U.S. monetary stimulus.  The hardest-hit emerging countries were those that have too much exposure to investors in developed countries, who may move their money from the developing world once the cheap money begins to dry up.  Worst off was Indonesia where equities fell nearly 13 percent in November, and on the year they are down more than 23 percent.

On the other end of the chart was China, which was up nearly 4.5 percent in November (it has gained almost 9.4 percent on the year). Besides China, Mexico and Poland were the only other emerging equity markets to avoid losses last month.

But things weren’t universally pleasant for industrialized economies, either. Although the 20 developed indices clocked in 1.6 percent growth, the number drops to 0.4 percent if the United States is removed, according to S&P Dow Jones senior index analyst Howard Silverblatt. The U.S. market rose 2.7 percent for November (it has surged 27.7 percent in the year to date).

At the other end of the spectrum, Australian shares fell more than 5 percent.

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