December 2007 was the month when the United States was in recession officially. Now 14 months later, the world is still in recession and economic recovery is not in sight.
Around the globe, no major financial markets were spared from the economic downturn. The level of indices of these markets as at yesterday and 31 December 2007 were at the following levels:
31.12.07 23.02.09 Change(%)
Dow Jones (USA) 13,264 7114 -46.3
S&P 500 (USA) 1468 743 -49.3
FTSE100 (UK) 6456 3850 -40.3
Nikkei 225 (Japan) 15,307 7376 -51.8
Shanghai Composite 5261 2261 -57.0
Hang Seng (HK) 27,812 13,175 -52.6
STI (Singapore) 3482 1630 -53.1
The decline was more than half for China, Japan, Hong Kong and Singapore. UK stocks were only down 40.3% and US’ Dow Jones Industrial Average Index was 46.3% drop. If the global economies continue to languish, we may see more downside risks for both UK’s and US’ stocks. Similarly, the other stock markets could slide further.
The question on everyone’s mind is when the bottom will be reached before share prices gradually break from the bottom. The key is for investors to watch the macroeconomics of major industrialised nations. More importantly, major financial institutions of the world have to stabilise first before economic activities can start.
Written on 2/24/2009 10:02 AM
Copyright © 2009, the author known as LKT in Singapore.
The material presented is intended to be general and written in layman’s language as much as it is possible. The author shall not be liable for any direct or consequential loss arising from any use of material written. Please seek professional advice from your financial advisor or financial institutions on material written covering financial matters.