While the S&P is set to net investors a double-digit return, not all major stock indices have been positive on the year.In fact, the worst performing stock market of 2012 fell by over 60 per cent.
A few of these nations have banking sectors that are in terrible shape. Some exchanges have suffered due to low liquidity. Others have underperformed as foreign direct investment has plummeted. And an unlucky few have a combination of all of the above.
The list spans markets from all across the globe, though European laggards are the worst of the worst.
All year-to-date returns data is from Bloomberg through December 28..
The BB All Share is off nearly two-thirds from its 2008 peak. This exchange has hemorrhaged funds, with its market capitalisation decreasing from 7.73 billion to 5.8 billion dinars since January 2011. Aluminium Bahrain BSC has gotten crushed, as its shares are down over 28 per cent on the year.
Sources: Bloomberg, Reuters via GulfBase
After three decades of warfare, Sri Lanka's exchange enjoyed robust returns in 2009 and 2010, but the market has been in decline since 2011. Through September, foreign direct investment fell just under 10 per cent year-over-year, and less than one per cent of the nation's citizens invest in stocks. However, the exchange seems to be ending the year 'on a relatively positive note.'
Sources: Lanka Business Online, The Island, Sunday Times
The World Bank ranked Mauritius the most competitive nation in Africa. Nevertheless, it struggles in spite of the country's business-friendly attitude. After posting strong years in 2009 and 2010, the market has been on a near two-year decline. The central bank is trying to get a handle on inflation, which hit a 2012 high of 4.2 per cent in October and is forecasted to increase again next year.
Structural economic problems have weighed down Jamaica's equity markets. Financial services is one of the few growing sectors, but leaves banks exposed to a high amount of credit risk.
Caribbean Cement Company has been the market's worst performer on the year, down 65.4 per cent.
Source: Trinidad Express
Macedonia's banks continue to be plagued by the plight of their European neighbours and persisting poor domestic economic conditions. For example, shares of Stopanska Banka Bitola have plummeted 38 per cent in value on the year.
In addition, recent budget disputes in government have sparked mass civil unrest.
Sources: Balkans, Bloomberg, Motley Fool
The IMF describes the Kazakh banking sector as 'vulnerable' since non-performing loans have reached an alarming 30 per cent of total loans. Big banks are currently deleveraging in an attempt to continue repairing their balance sheets.
Also, a poor harvest put a damper on grain exports.
Sources: IMF, Financial Times
Monetary tightening in 2011 to combat inflation triggered this market's decline -- which continues to this day. Investors have been discouraged by a lack of liquidity and big-cap companies in the market.
However, Swiss hedge fund manager Roberto Pusterla claims, 'Bangladesh has a huge potential as the country's economic growth and performance by listed companies are very good.'
Sources: Time, Finance Asia, Asia News Net
The Mongolian government's restrictions on foreign investment passed in May elicited a 44 per cent plunge in foreign direct investment by September, year-over-year. This drastic drop in FDI and weakening commodity prices and exports have contributed largely to the stock market's underperformance.
A mass exodus of banks and financial institutions since the sovereign debt crisis has hampered the nation's stock market and contributed to the low liquidity in the market. As well, experts have pressured the nation to remove the hryvnia from its pegged exchange rate to the dollar and allow it to be devalued.
The government has taken its fair share of heat for the poor performance of the exchange, with some going as far as to declare that 'The Yanukovych administration has effectively killed the Ukrainian stock market.'
Sources: The Lawyer, Kyiv Post, Business New Europe
The Cyprus General is trading at just over 2 per cent of its 2007 high. Equities have underperformed due to this nation's debt crisis, for which it is set to receive E.U. bailout money. In particular, Hellenic Bank PCL and Bank of Cyprus PLC have gotten crushed on the year.
The budget situation in Cyprus has gotten so dire that the government has borrowed from public authority pension funds in order to meet other obligations.
Sources: Bloomberg, Sydney Morning Herald