Which markets did best from Berlin Wall's collapse? Wall St. and the BRICs, of course
LONDON (Reuters) - The toppling of the Berlin Wall made free market economics the norm across Europe - but which financial markets have done the best since then? Wall Street and the BRICs, of course.
While the events of 1989 redefined Europe’s boundaries, they also ushered in almost two decades of powerful economic liberalisation and globalisation that took in China, India and Latin America - a wave that is only now cresting.
They are not the only factor, by any means. Also at work is a 30-year drop in global borrowing costs as inflation has been beaten back - even amid a boom for commodity producers, whose resources China has gobbled up.
A reunited Germany cemented itself as Europe’s largest economy, but an analysis of market performance suggests that the biggest winners are Wall St, flagbearer of Western capitalism, and the emerging ‘BRIC’ economies - Brazil, India, China and Russia.
Since Nov. 9, 1989, the S&P 500 has surged 1,635% in value, stocks in eastern Europe’s largest economy Poland are up 550%, and Russia’s Moex has risen nearly 900% since it became firmly establish in the late 90s.
That compares to a 350% rise in the reunified German DAX when calculated in dollar terms, 320% in MSCI’s broadest world stocks index .MIWD00000PUS, and nearly 460% in its global emerging market equivalent. .MSCIEF
“There are multiple stories here,” said SEB Investment Management’s global head of asset allocation, Hans Peterson.
“In combination with the growth in emerging markets when they were liberalised and when ...
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