Eastern Europe: Equity Markets rally in Q2
Overview:
The majority of stock indices in Eastern Europe had a disastrous 2008 falling between 50% and 80% in value. Most continued to record losses in the first quarter of 2009 (Russia was an exception). However, Q2 provided a relief rally across the region. Most indices posted double-digit percentage gains and some gained over 50% although from very depressed starting levels. The majority, indeed, posted positive returns for H1 2009 but some of this positive momentum has dissipated in the first few weeks of Q3. Moreover, these percentage gains hide the fact that most indices are still well below the levels seen at the end of 2007. On average they have retained only 40% of this level. Furthermore, there is a very high correlation between Eastern European markets which are also strongly influenced by global equity moves.