World Stock Market Cap Hits A 26-Mo. High in Sept.

According to the World Federation of Exchanges, a Paris-based association of 52 stock exchanges around the world, the world stock market capitalization reached more than $50 trillion in September, the highest monthly value in 26 months, since July 2008.  That was an increase of almost $4 trillion (and 8.2%) compared to the $46.4 trillion value of global equities in August, and a $10 trillion increase since September of last year.  Compared to the cyclical low of $26.6 trillion in February 2009 from the effects of the financial crisis and global economic slowdown, the world stock market capitalization has now almost doubled to $50.2 trillion last month, a gain of 89% in the last 19 months. 

A lot of the growth in world equity values over the last year has been driven by strong returns in the emerging markets (17.5% overall for the MSCI Emerging Markets Index), with especially strong returns over the last 12 months in countries like Chile (53%), Colombia (48%), Turkey (44%), Thailand (43.5%), Indonesia (39%), Philippines (29%) and India (27.5%).  In contrast, developed markets have underperformed the emerging markets over the last year, with returns of 3.3% for Europe, 10% for North America and 4.4% for the Pacific region (data here). 

This strong rebound in global equity valuation to a 26-month high in September of $50 trillion is evidence that the world economies are making a gradual comeback from the 2008-2009 recession and financial crisis, and also means the chances of a global-based double-dip recession are fading away.  

See Scott Grannis' related post "Global Equities Mark a Post-Recession High."