The "oncological boom" continues in full force. Venezuelan stocks continue to surge on the heels of a recurrence of Hugo Chavez's cancer.
Today it was announced that Chavez was flying back to Cuba for radiation treatment. It appears that the radiation treatments were planned as part of his treatment all along so today's news shouldn't have any direct bearing on Venezuelan equities. However with the way the market surged 10% this past week, it's almost as if this news came as a surprise and that it was leaked. The 10% weekly gain by the Venezuela Stock Market Index made it the best performing benchmark equity index by far, more than doubling the 4.7% gain by Montenegrin stocks.
Extending our view further back, the numbers are even more remarkable. The Venezuelan stock market is up over 60% year to date and an astounding 185% going back to January 2011.
We've still been unable to find a free source for Venezuelan stock quotes so we're unable to analyze the performance of individual companies within the index. It would be very interesting to see which stock was the top performer out of an index that has gained 185% over the past 15 months. However it could very well be that the gains are fairly evenly distributed across the index especially considering that the main motivation for the surge (potential regime change towards a more free-market oriented administration) is macro based.
This next chart is a possible sign that the equity markets may have gotten way ahead of themselves. GDP growth since 2007 is about 60% while equities are up 250%. Stocks would have to fall about 35% from here to fall back in line with GDP growth.
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