Economics

Worst Equity Growth In The Stock Market By Country

Greece, Kazakhstan, and Zambia saw their equity value decrease by almost 50% each in 2015.

Worst Equity Growth in the Stock Market by Country

Shares, bonds, and T-bills are important sources of return on investments. Most companies and organizations have increased their sizes and dominance in the financial markets through such direct and indirect investment. Public companies have more than one shareholder who has invested in them. Each shareholder benefits from the company’s revenue according to the number of shares they own. The shareholder also votes according to their share in the company. Equity value, therefore, is the total value of the company available to the shareholder or owner. Equity value comprises of the sum of enterprise value, investments, cash, and cash equivalent less debts and interests. Some countries have witnessed a decrease in the value of their equities in the stock market. Some of the countries with worst equity growth in the world include

Greece

Greece is slowly recovering from a crisis that hit its financial sector between 2014 and 2015. The country’s stock was the biggest losers falling to their lowest prices in 16 years. 2015 witnessed a -47.9% change in equity value in the stock market. Investors quickly abandoned riskier assets as their market values fell significantly. 2015 saw a rise in the recapitalization in the market with millions of shares struggling to attract investors. Lenders dominated Greece stock market with larger shares of interest.

Kazakhstan

Kazakhstan’s stock market is one of the underdeveloped stock markets in the world. The country continues to witness a plunge in equity values experiencing the worst performance in 2015. Kazakhstan managed -47.6% changes in equity value in 2015 due to the struggles to create liquid and efficient stock market. The equities were only valued at $3.8 billion. The country sits on a lot of cash but is not able to invest to make real returns. Kazakhstan plans to attract foreign investors by relaxing most of its investment regulation. Foreign investment is one of the ways to improving equity values in the stock market.

Zambia

Zambia’s equity value changed by -45.6% in 2015. The significant fall in the value of equity is attributed to the drop in the prices of copper which is the primary source of country’s export earning accounting for 70% of total exports. The move by Federal Reserve Bank of US to purchase Zambia’s stocks had the greatest impact. Zambia’s debut into the international bond market in 2012 also triggered demands further pushing the yield to only 5.63%. Zambia’s government hopes that through privatization of some of its assets more foreign investors will be attracted to the country that will, in turn, have a positive effect on their stock market.

Conclusion

Brazil, Colombia, and Cyprus are also some of the countries that had more than -40% changes in their value of equity traded in 2015. The negative equity values in these countries have scared away foreign investors denying them Foreign Direct Investment benefits. Foreign investors are cautious to invest in these economies because they are unpredictable and not stable. These countries continue to borrow to sustain their large economies. The borrowing further reduces the equity value and performance in the global stock market. To sustain growth, these countries need to invest in local industries or encourage privatization of most of their assets.

Worst Equity Growth In The Stock Market By Country

RankCountryChange in Equity Value in 2015
1Greece-47.9%
2Kazakhstan-47.6%
3Zambia-45.6%
4Brazil-44.3%
5Colombia-41.0%
6Cyprus-40.9%
7Peru-34.4%
8Turkey-32.1%
9Ghana-29.6%
10Luxembourg-29.3%

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