Simply the best

So far this year, equity markets all over the world have fallen, and by a lot. There are many reasons for this, but they mostly have to do with bad economic news - US unemployment is rising, global inflation is rising, major banks continue to write down assets, credit spreads have blown out etc etc. The FTSE 100 in the UK is down nearly 9% year to date - that's over 12 trading days! Same with the S&P 500, every other developed market index, and almost every emerging market index (according to my Bloomberg screen).

Except for two, and one doesn't count. The Shenzhen Stock Exchange index is up more than 3% year to date, but if you amalgamate the gain with the losses on the Shanghai Stock Exchange, then Mainland China's equity markets as a whole have lost ground. The Kuala Lumpur Stock Exchange is then the sole equity market in the world that has shown a gain year to date, with a gain of around 2%.

Hurrah then for Malaysia - except that things aren't supposed to go so well. Malaysia's economic growth is expected by analysts to slow this year, and inflation is supposed to continue to rise. This means that interest rates will have to go up, and this is not so good for equity markets. The explanation for the gain is likely to be more prosaic - this year is an election year, and until the election at least, equity markets need to continue to rise to spread the feelgood factor.

Oh well.