Denmark and Pakistan: The Surprising Stock Markets That Outperformed in 2020
2020 has been an eventful year for investors, to say the least. Global stock markets lost trillions of dollars in value when the COVID-19 pandemic erupted across the world. Between mid-February and late-March, the S&P 500 had lost over a third of its value. Since then, the index has climbed a jaw-dropping 56.8% to eliminate all losses this year.
That stunning performance has been replicated in other parts of the world. India’s Nifty 50 index had lost 37% of its value over the Feb-March period and has since surged 49.6%. China’s Shanghai Composite Index performed relatively better. After losing just 5% of its value between Feb-March, China’s stock market has climbed 27.6%. That makes it one of the few global indices that has delivered positive returns year-to-date.
However, two surprising indices have outperformed even China. Denmark’s OMX Copenhagen 25 is up 14% year-to-date. The gain is magnified to 20% when currency fluctuations are accounted for, according to the New York Times. Part of the reason for Denmark’s outperformance is the structure of the country’s index. Roughly half of the largest stocks in the tiny European nation are healthcare and pharmaceutical companies. These companies have always been recession-proof but have outperformed during a global health crisis.
Another surprising outperformer? Pakistan’s Karachi Stock Exchange 100. The US dollar-adjusted return for the KSE 100 is 38.5%. According to the Economic Times, Pakistan’s central bank has been more aggressive in cutting interest rates and stimulating the economy than many of its counterparts. As bond yields in the nation fell below double-digits, foriegn capital has been flowing in making Pakistan’s stock market the best performer in Asia and the fourth-best performing stock market in the world.