In what was a runaway contest, the best performing stock market for 2011 turned out to be Venezuela, gaining 78%. Second and third place went to Mongolia and Panama which gained 47% and 29% respectively. Here's the list of the top 10:
The last time we featured Venezuela in our Major Market Move post was back on November 8th and the stock market was up 67% at that time. A major reason for the surge in Venezuelan equities is Hugo Chavez's cancer diagnosis and the hope for regime change towards a more free market oriented government. We've referred to this in the past as the "oncological boom" and if Hugo's cancer ends up going into remission it will be interesting to see the market's reaction.
Extending our view back to 2007, we can see that Venezuelan equities have trailed GDP growth, at times by a large margin, until the latter half of 2011.
Can the Venezuelan market continue to rise merely on the hope of reform without actual concrete change taking place? I have a strong suspicion we will have an answer to that question before we are ringing in 2013.
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