Tag Archives: PIIGS

World global trends: bearish o bullish in February?

February is usually an unstable month for the markets. In this case, emerging markets have suffered more from this instability. We have already spoken about it before. The current quantitative easing cut made by the Federal Reserve affects negatively the capital flows to these countries.

T-Advisor charts show clearly these global trends. Although general markets are not specially bullish, the bearish trend is harder in Asia and Latin America:

Global trends february by T-Advisor

Even more, the worst markets in our list (from the last) are Peru, Brazil, Japan, Chile, South Africa, Mexico and Turkey. With the exception of Japan as developed country that is living some different conditions, the others are emerging markets mainly in Latin America.

Global trends LatAm by T-Advisor

Emerging Asian countries are a bit better that always in a bearish trend:

Global trends Asia by T-Advisor

In this case, the drop begun last year in June. Although the line was stable in the autumn and the beginning of the year, it registered a new hard decline in February.

Just to compare: Latin American countries quoted before have less than 20% of their listed companies with a bullish trend (in Peru and Chile, less than 9%), while Asian countries as China, Singapore, India and Hong Kong have between 20-25%. The only exception in this trend in emerging markets is Argentina, with some different components in its economy.

At the top of this list, the leaders were continuously in February the denominated PIIGS (Portugal, Italy, Ireland, Greece and Spain). Their markets, as we published before, were cheap for investors and attracted capital flows in their exchanges. In these cases, they had always bullish more than 40% of their companies (in Portugal, up to 60% or a bit more).

This kind of charts helps investors to detect risk and investment chances in the current pricing of the markets.

PIIGS, dirty or pata negra markets?

It is already a bit long time since the beginning of the (still) current financial crisis, when Lehman Brothers declared on bankruptcy and panic rushed into the stocks exchanges. The wave, or much better tsunami, affected deeply all the world, but southern European countries and Ireland (the celtic tiger) suffered the hardest consequences: Portugal, Ireland and Greece were bailed out, Spanish banking system was also bailed out and Italy stood close but finally avoided a troika indirect government.

The acronym PIIGS, from the initials of these countries, emerged again, pointing them contemptuously. Their stocks exchanges experienced a big fall of, at least, two thirds of their value from the highest point to the lowest, as our table shows. All of them presented cheap prices. After the worst part of the crisis, PIIGS show now positive signs in their economies and capital flow again, but prices are still cheap.

MARKET

HIGHEST(2007) LOWEST(2012) DIF. % CURRENT(YESTERDAY)

DIF. % VS. HIGHEST

Spain

15.945,70

6.065,00

- 62%

9.982,70

- 37%

Portugal

13.657,70

4.512,27

- 67%

6.928,19

- 49%

Italy

44.364,00

12.895,00 *

- 71%

19.682,82

- 55%

Greece

5.334,50

485,18

- 91%

1.260,17

- 76%

Ireland

9.968,48

1.916,38 *

- 81%

4.802,82

- 52%

* Lowest in 2009. Sources: Historical indexes charts and T-Advisor compilation

Last year was quite good in PIIGS markets, with a high performance in Spain and Italy, for instance, but the trend keeps on, as the Global Market tool in T-Advisor show. These are the six more bullish markets last week:

PIIGS: Six top bullish markets by T-Advisor

This result repeated in January: Spain and Portugal were the whole month in the top 3 and Italy amongst the 5 more bullish. “PIIGS can fly”, said recently an analyst quoted by AFP, although the sentence is not new, as some comments focused already in that way last October. However, uncertainty remains in these countries. Portugal and Greece are still indirectly ruled by the troika, while Italian and Spanish growth outlooks are still weak. In any case, investment trends detected by T-Advisor tools show that PIIGS markets were in January, at least, pata negra.