Major political developments in three key Asian nations this year seemed to have spurred their share markets, according to Fundsupermart.
India, Thailand and Indonesia all reported double-digit gains for the first nine months of the year, far better than other markets surveyed by the online unit trust distributor.
They were also the top performers in the third quarter among 18 major stock market and regional indices that Fundsupermart examined. The returns are based on Singapore dollar terms.
India topped the list with its benchmark Sensex index rising 27 per cent for the first nine months and 4 per cent in the third quarter alone.
Prime Minister Narendra Modi, who assumed office in May, helped to provide much of the fillip, noted Fundsupermart. Mr Modi has set an economic expansion target of 7 to 8 per cent a year through pro-growth reforms during his term.
Thailand was second with a 24.5 per cent increase in its benchmark SET Index for the first nine months and a 9.2 per cent jump in the third quarter. The Thai military took over the running of the country in May, a development that boosted stock markets after months of street protests both for and against the government led by Ms Yingluck Shinawatra.
"The junta's efforts to restore normalcy to the kingdom have since led to a rebound in business and consumer sentiment," noted the report.
But Fundsupermart said valuations of the Thai market are stretched, with the SET Index trading at an estimated price-to-earnings (PE) ratio of 16.2 times this year, above its fair PE ratio of 12.5 times.
Indonesia's benchmark Jakarta Composite Index rose 21.5 per cent for the nine-month period and 4.9 per cent in the third quarter. President-elect Joko Widodo, better known as Jokowi, helped fuel the rally.
"He is well received amongst ordinary citizens due to his humble and caring image, (while) investors are also in favour of his business-friendly attitude," the report noted.
Still, Fundsupermart added that valuations have become more expensive, as earnings for companies this year have been revised down by 6.75 per cent compared with the start of the year.
Russia came in last; its Russian Trading System Cash Index was down 21.6 per cent for the first nine months and 15.9 per cent for the third quarter.
Geopolitical concerns over its involvement in the Ukraine crisis and new rounds of sanctions imposed by Western powers have hit investor confidence.
Among the other indices on the list, the United States was the fourth best with the S&P 500 generating a return of 7.8 per cent for the first nine months and a 2.9 per cent rise in the third quarter.
Singapore's Straits Times Index (STI) and the MSCI Asia excluding Japan Index were joint fifth best with a 3.5 per cent return for the first nine months, although the STI did better in the third quarter, gaining 0.6 per cent compared with a 0.3 per cent dip for the MSCI Asia ex-Japan Index.
This article was first published on Oct 7, 2014.
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