Sri Lanka among best performing stock markets after Venezuela, Hanoi

ECONOMYNEXT – Sri Lanka stocks have risen the most in the world in 2021 after Venezuela in local currency and is just behind Vietnam and Bermuda in US dollar terms among stock markets tracked by Bloomberg, a financial news and data provider.

Venezuela stock market index was up 30.77 percent to 1.74 million by January 15, Bloomberg data show, behind 14.18 percent for the Colombo’s All Share Price Index.

Venezuala had soared becoming a top performer in past years.

The ASPI’s 3.91 percent gain on January 15 was the highest daily rise among markets tracked by Bloomberg.

Colombo stocks were up 9.72 percent in US dollar terms. There is no comparable data for Venezuela, which has seen steep currency falls after record money printing over several years, despite being a top oil producer.

Vietnam’s Hanoi Stock Exchange Index was up 11 percent in local currency and 11.15 percent in US dollar terms.

The State Bank of Vietnam has not printed money for stimulus since a 2008 crisis and has been operating a system slightly tighter than a currency board, building up forex reserves.

The International Monetary Fund has advised the State Bank of Vietnam to reduce mopping up inflows, which the SBV has ignored and has continued up to now, analysts say.

The strong currency has led to the Trump administration labeling it as currency manipulator which undervalues the Dong, a false charge usually laid against strong exporters with stable currencies by the US Treasury.

Vietnam has pointed out that its policy on the Dong is for domestic stability and not for trade advantages.

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The Dong has appreciated slightly in recent days.

Bermuda stocks were up 9.92 percent in Bermudian dollars and also 9.92 percent in US dollars.

Bermuda has a currency-board-like arrangement against the US dollar since 1972 with a one-to-one parity, when it switched the anchor currency from the Sterling to US dollar when the Bank of England floated, as the Bretton Woods collapsed from US money printing.

Bermuda had a true or orthodox currency board from 1915 without a ceiling policy rate until the Bermuda Monetary Authority law of 1969.

In practice its currency had also not depreciated since 1972, with operations similar to a currency board, though the BMA is no longer considered by experts as being a true or orthodox currency board.

Due to monetary stability it is a financial centre and over 12,000 foreign companies are registered there.

Chile’s General Index was up 9.35 percent in local currency but only 5.9 percent in US dollars. The country which has one of the most market oriented economies in South America has seen some monetary instability in recent years.

Bangladesh’s Dhaka Broad Index was up 8.31 percent in local currency and 8.29 percent in US dollars. The second index DSE 30 was up 12.42 percent.

Vietnam’s Ho Chi Minh Stock Exchange was up 8.18 percent in dong and 8.33 percent in US dollars.

Vietnam is also one of the fastest growing countries after controlling Coronavirus along with other countries close to China such as Cambodia (439 cases zero deaths, Bhutan 842 cases, 1 death, Mongolia 1,517 cases 2 deaths and Taiwan (855 cases 7 deaths).

Sri Lanka is also actively tracing and isolating cases but there has been a steady trickle of deaths and cases.

Dubai’s DFM General Index was up 8.10 percent, and also 8.10 percent in US dollar terms. The UAE monetary authority is also a quasi-currency board with a fixed exchange rate. (Colombo/Jan17/2021)

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