Brazil may have been the best bet for global equity investors in 2009 but

RELATED ARTICLES IDBI MF considering introduction of more equity products Sony top contender for Olympus equity tie DoD awaiting Sebi guidelines on buyback of equity Most Indians optimistic about 2012: Poll

it was Ukraine – in spite of the fractiousness of its political elite in recent years – that offered an unbeatable return of nearly 900 per cent over the decade, data compiled by Reuters show.

The former Soviet state was the best performing stock market in the world in the past 10 years, surging 890 per cent in dollar value, though 1999-2009 returns from government debt generally outstripped those generated by equities.

Along with Russia, stocks in Brazil, India and China beat developed-country equities during the decade as surging commodities lifted the fastest-growing markets, while investors lost money in advanced nations from the US to Germany. The so-called Bric stocks, led by Russia, climbed since the end of 1999 as equities in the biggest developed markets retreated. Emerging market stocks rose as oil prices almost tripled, copper quadrupled and economic expansions boosted demand. A collapse of technology shares in 2000 and banks last year spurred losses in the US, Japan, the UK, Germany, France and Italy.

“It’s been the decade of emerging markets,” said Justin Walters, the co-founder of Bespoke, a research firm based in Harrison, New York. “Oil has been another major theme, and the two go hand-in-hand. The commodities boom is broad-based. The developed countries have pretty much been awful.”

In 2009, the best performing market was Brazil whose Bovespa Index surged 145 per cent in dollar terms, fuelled in part by the 29 per cent rise in the value of its real currency versus the greenback.

Along with Peru and Sri Lanka, Ukraine was also among the top 10 performing stock markets in 2009, a year that saw emerging equities more than double the gains of the MSCI main developed market index.

Peru's Lima General Index ranked second best, with 120 per cent returns, followed by the Philippine SE Industrial Index — the second-best performing bourse in local-currency terms — with 118 per cent.

The dollar-denominated Russian RTS index was in fourth place, chalking up over 116 per cent, with Indonesian shares just trailing behind.

Shares in Bahrain and Slovakia were the worst performers globally in both local currency and dollar terms, with losses of some 20 per cent.

Norway offered the best returns within 10-year government debt in 2009, generating 25 per cent for the year, but those that bought US bonds would have seen their investment shrink seven per cent during the year. Ukraine’s PFTS Index managed to double in dollar value in 2009 despite the economy’s dependence on a $16.4 billion bailout programme from the International Monetary Fund, now suspended over the inability of government leaders to take concerted action to meet its economic and financial obligations.

Over the decade, the market capitalisation of the Ukrainian bourse has increased ten-fold to $26 billion, fuelled by large-scale privatisation of state assets and the explosion of new securities sales. The Ukrainian equity market is also fairly diversified. While the majority of stocks are related to the iron and steel industry, which is the main export of Ukraine, it is by no means a dominant sector. Other sectors, such as banking, power utilities, oil and gas, telecom, and engineering are gradually expanding their presence.

Peru was the second best performing bourse, leaping 842 per cent, followed by Russia’s RTS Index at 697 per cent and Romanian at 567 per cent. On a 10-year basis, US equity investors would have suffered the worst performance on record in what has come to be known as ‘the lost decade’. Even in total return terms, investors in the S&P 500 would have lost 9.8 per cent – in stark contrast to holders of 10-year US bonds who would have seen returns of 84 per cent over the same period.

Canada was the only G-7 nation where stocks rose — S&P/TSX climbed 35 per cent, while a 48 per cent decline in Italy’s benchmark FTSE MIB Index led losses among the other G-7 countries.