Korean stock market ranked 11th in returns this year

The Korean stock market retreated more than 10 percent this year due to the eurozone crisis, but is selected as the best performer in Northeast Asia, ranking 11th highest among the world`s top 49 stock markets.

According to FnGuide and Taurus Investment & Securities Wednesday, Korea`s stock market yields have posted minus 10.82 percent as of Friday, the 11th highest among 49 stock markets listed by Morgan Stanley Capital International. Japans stock market returns plunged to minus 18.07 percent due to fears of economic fallout from the March 11 earthquake, ranking 23rd.

Hong Kong ranked 25th at minus 18.36 percent, China 28th at minus 19.03 percent, and Taiwan 34th at minus 11.86 percent.

Volatility in the Korean stock market has sharply increased since August, with the benchmark KOSPI plummeting more than 200 points at one point to below 1,680. Yet Korea`s sound economic fundamentals allowed them to fare much better than other countries. Steady corporate earnings also helped Korea set a new annual trade record of 1 trillion dollars.

Taurus analyst Oh Tae-dong said, "Korean stocks put up a strong defense against the volatile market since they were indirectly hit by the eurozone fiscal crisis, political uncertainties were subdued, and the current account maintained a steady surplus," adding, "The domestic stock market is expected to be at least in the middle rankings among major countries next year."

The so-called PIIGs (Portugal, Italy, Ireland, Greece and Spain) and BRICs (Brazil, Russia, India and China) saw their stock markets plummet. Spain`s stock market yields ranked 21st, Italy`s 37th and Portugal`s 38th.

As fear spread of a Greece default, the value of the Greek stock market plunged 64.34 percent to rank the lowest. Germany and France, the two main pillars of the European economy, also ranked in the bottom of stock market returns at 30th and 31st place, respectively.

BRICs countries saw stock market returns fall to around minus 20 percent. Russia ranked 30th, Brazil 36th, and India 45th with minus 36.57 percent.

Just three countries saw positive returns. Ireland had a 7.79-percent return, Indonesia 4 percent and the U.S. 0.5 percent.

Oh said, "The U.S. economy cannot be assessed to fully recover from the 2008 global financial crisis as delinquent ratios on subprime mortgages is still high. It will take a while for consumption of durable goods including housing to pick up. The long-term economic cycle will start to recover in 2013."

yunjung@donga.com