Monday, December 19, 2011

Today's Major Market Move: Bermuda Stock Exchange Declines 10% in 2011

On a relative basis, a decline of 10.3% from the beginning of 2011 and a decline of 19% from the highs of 2011 are not particularly bad. Consider that the two worst performing equity markets, in Greece and Cyprus, have seen declines of 62% and 77% from the beginning of 2011, and declines of 69% and 81% from the highs of 2011. However what makes the situation precarious for Bermuda is the fact that the 19% decline from the highs occurred in steady drop in only 4 months. Furthermore, the most recent news is not encouraging as the stock market declined 5% today to bring it to new lows.

Click here to go to the live chart.

As a political entity, Bermuda is a British overseas territory with quasi independence. The IMF doesn't maintain separate GDP data for Bermuda so unfortunately we're unable to make a comparison between stock market performance and gdp growth. Their currency (Bermudian Dollar) is pegged to the US Dollar and the US also happens to be by far their largest trading partner so they would have to break the peg if they wanted to join in on the global "lets-devalue-our-currency-to-increase-exports" fun and games.

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