Best and worst performing stock market regions in 2017

The top performing stock market region in 2017, in terms of returns provided to investors, was Poland. A rising economic star of Europe, the country’s stock market returned investors 34.7 per cent.

While Poland’s ruling Law & Justice Party has faced heavy criticism in the press and from the European Union, the country’s economy has still managed to surge ahead – the World Bank recently estimated that Poland’s economic growth rate will reach 4 per cent in 2017.

Poland’s strong showing this year, however, is also part of a wider trend of strong performance for some Eastern and Central European economies. Two other economies from Eastern Europe were also included om the top 15 performers: Czech Republic and Hungary, seeing returns of 28.4 per cent and 21.3 per cent, respectively. These and other formerly communist-ruled states – sometimes referred to as emerging and developing Europe – were collectively forecast by the IMF, in its October 2017 World Economic Outlook, to grow by 4.5 per cent in 2017. By contrast, the Eurozone is expected to grow by 2.1 per cent. 

That’s not to say that Eurozone countries didn’t do well either. Austria, with returns of 31.1 per cent, was the third best performing region, while Italy, with returns of 20.4 per cent, and the Netherlands, with returns of 23.19 per cent, were also in the top 15.

The second-best performer was South Korea, seeing returns of 32.7 per cent. Korea’s largest companies have seen strong performance from some of its largest listed companies such as Samsung and SK Hynix. Combined, the two companies saw their operating profits reach £43.03 billion in the first three quarters of 2017, up by 95 per cent on the previous year. 

-Top 10 investment trust winners in 2017

These companies, notes Russ Mould of AJ Bell, benefited from a boom in silicon chip prices. Further, Samsung was able to rehabilitate its reputations among investors after a number of previous mishaps. Mould adds: ‘Samsung offered clear plans to improve shareholder returns via dividends and share buybacks.’ At the same time, Mould says, investors were encouraged by ‘improved corporate governance across the Korean market’ in general. 

Another major winner was India, which returned 29.9 per cent in 2017. According to Mould, this can be attributed to ‘hopes for prime minister Narendra Modi’s package of social and economic reforms.’ However, he warns that Indian stock prices are now reaching pricey territory. 

Return in GBP, YTD as at 15/12/2017. Return in GBP, YTD as at 15/12/2017. Source: Morningstar 

The worst performing region was Qatar, primarily due to being placed under economic blockade by neighbours Saudi Arabia, Egypt, Bahrain and the UAE. In total it has seen a return of -23.32 per cent. ‘After effectively being cut off by much of the rest of the Arab world,’ notes Ben Yearsley, director of Shore Financial Planning, ‘it’s not surprising their market had a torrid time and ending up the worst performing market of 2017.’

Among the worst performers of 2017 were a number of commodity and oil export reliant economies, including Russia (-1.85 per cent), Canada (Canada 3.86 per cent) and Australia (8.21 per cent). This, notes Yearsley, is the opposite of what might have been expected, with oil and commodity prices staging a recovery in 2017. However, he notes: ‘Commodity companies had a year of consolidating their positions after such a rollercoaster in 2016.’ 

Going in 2018, however, their performance may well pick up. ‘Commodity companies are in much better shape…so it will be interesting to see how they perform. If they have a good year, expect these three countries to also do well,’ adds Yearsley. 

Return in GBP, YTD as at 15/12/2017. Return in GBP, YTD as at 15/12/2017. Source: Morningstar 

Keep up to date with all the latest personal finance news and investment tips by signing up to our newsletter. Email subscribers will also receive a free print copy of Money Observer magazine.

Subscribe to Money Observer Magazine

Be the first to receive expert investment news and analysis of shares, funds, regions and strategies we expect to deliver top returns, plus free access to the digital issues on your desktop or via the Money Observer App.

Subscribe now

Add new comment