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In 2018, seemingly every asset class was a loser. In 2019, it’s been the reverse, with opportunities abounding — and some of the biggest winners have come from unexpected corners of the market.
This year featured geopolitical flare-ups like escalation in the US-China trade war and the UK’s Brexit drama, but markets were buoyed by factors like a dovish turn from central banks including the US Federal Reserve. Add it all together and there was surprising market resilience despite periodic barrages of negative headlines.
“It’s been sort of fun trading this,” said Stephen Innes, Chief Asia Market Strategist at AxiTrader Ltd. “Overall the trend has been up and just playing the reversions on all these massive hiccups has been very fruitful on virtually every cross asset right across the board. It’s been a good year on a number of fronts for everybody.”
While most of the industry’s attention has been on the records in US stocks and global equity benchmarks, there have been notable moves in other corners of the market this year as well. Here’s a look at a few of the biggest standouts.
Russian ‘revolution’
In a year where the US imposed several rounds of fresh sanctions on Russia and Moscow was rocked by seven weeks of protests, the country’s equity market has performed best globally on a total-return basis in dollar terms, and its currency is the second-best worldwide. Stable oil prices have allowed Elvira Nabiullina, Governor of the Central Bank of Russia, to cut rates five times. That helped with the rebound from a sell-off in 2018 some saw as excessive.
Greece lightning
Vying with Russia for the year’s best equity market performance is Greece, which started a turbulent decade with a financial crisis and an IMF bailout — and now ends it with a stunning rally for both stocks and bonds.
Reforms in the country have started to pay off and the far-left Syriza party was ousted by the centre-right New Democracy in an election in July. Easy money from the European Central Bank helped, allowing the country to borrow at negative interest rates during October.
Ukraine’s moment
The world’s best-performing currency this year? It’s the Ukrainian hryvnia, which saw a largely uninterrupted period of stable appreciation in 2019. A package of market-friendly reforms as part of an IMF programme has allowed the central bank to slash interest rates, helping to boost economic growth.
Beyond Meat
In a bad year for start-ups, stocks tied to the fake meat craze stood out — particularly vegan food producer Beyond Meat Inc. But it also generated a boom in Chinese companies looking to cash in on the momentum — with such frenzied buying around stocks tenuously linked to the trend that the Shenzhen stock exchange started to ask questions about producers of real meat, not the ersatz stuff.
Palladium’s record
Palladium prices shot up about 51 per cent and surpassed $2,000, making it the year’s best-performing precious metal.
”Palladium is a clear-cut situation of limited supply meeting increased demand from an automobile industry having to produce better and more environmentally friendly engines,” said Ole Hansen, Head of Commodity Strategy at Saxo Bank A/S. “With the main demand coming from this sector the price can potentially go much higher if supply remains tight.”
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