PERU : WORLD´S BEST STOCK MARKET ? / THE FINANCIAL TIMES

World’s best stock market?

Published: July 24 2009 09:50

Forget sizzling China or bubbling Brazil. The world’s best performing stock market this year, with bulls even more rampant than on an alpaca farm, is Peru’s. Lima’s general index has more than doubled; Shanghai has risen by “only” 85 per cent.

Civil unrest has not deterred investors. The economy is expected to grow 3 per cent this year (even Brazil is forecast to shrink); last year’s fiscal surplus is being deployed to stimulative effect; and while interest rates have been slashed, inflation remains in low single digits - quite an achievement given that the last time President Alan Garcia led the country, Peru suffered hyperinflation.

The boom is due to the resource companies that dominate the local market; Peru is the world’s third largest copper, zinc and tin producer, the largest silver miner and fifth biggest gold producer. Liquidity is tight, but recently launched ETFs provide a painless way for foreign investors to join the Independence Day celebrations on Tuesday.

Copyright The Financial Times Limited 2009