KEY POINTS:
Forget the Olympics - China has already won one gold medal this year. It's the world's worst performing stock market, with share price falls in local currency terms of 47.6 per cent since the beginning of the year. The good news is that the main Shanghai Stock Exchange remains 100 per cent higher than its level three years ago, but last year's bubble has very definitely popped.
Even as share prices began falling last November, analysts claimed China's booming economy gave investors every reason to be optimistic. But the market is still falling.
China's economy remains buoyant, with strong growth continuing and inflation projected to fall back this year.
However, an oversupply of stock remains after a frenzy of new issues at the peak of the market, and local investors' confidence has been rocked.
VIETNAM
As in so much of Asia, food and oil price-inspired inflation is the biggest problem facing Vietnamese economic policymakers, whose attempts to tighten liquidity over the past 12 months caused a stock market crash.
Share prices fell on every single day of May, as local investors stampeded for the exit, and the market is now down by 47.5 per cent this year.
Still, Vietnam's long-term prospects are brighter, with natural resources including plentiful supplies of rice, rubber and tea. The country's rapidly expanding tourism industry is another plus, and it is now a fully fledged member of the World Trade Organisation.
JORDAN
Think Middle East, think oil. Unfortunately, Jordan is short of the black stuff, and while its rapidly growing population had grown accustomed to generous energy subsidies from the state, these are being phased out.
Cue a near-doubling in the rate of inflation to above 9 per cent. An even more pressing issue for many Jordanians has been the collapse of the property market, where prices had quadrupled since 2003.
This has hit commercial property developers hard as well as local residents, who have rushed into property as 20-year mortgages have become available in recent years, replacing the five-year loans that were previously the norm.
UKRAINE
Ukraine's plentiful natural resources have helped boost its citizens' incomes by 47 per cent over the year to the end of April. But that growth has spurred a boom in consumer lending which, following a rise in interest rates from 1.2 to 8 per cent this year, has rapidly turned to bust.
Standard & Poor's says Ukraine's financial sector has the worst quality credit portfolio among the developing countries of Europe, with potentially problematic loans constituting 75 per cent of the typical bank's portfolio. The stock market is down 38.7 per cent over the past six months.
CYPRUS
The performance of Cypriot equities is closely linked to the fortunes of the country's near neighbour Greece, where the stock market has been similarly disappointing.
The market is dominated by banking stocks, which have fallen victim to the global credit crunch. A rise in Cypriot interest rates in June has compounded the problem. The market has fallen 36.7 per cent this year.
BULGARIA
One of last year's accession states, Bulgaria's European Union membership is paying dividends, with an economic growth rate of 5 per cent that is one of the highest in the bloc. However, with that growth has come rampant inflation and increasing frustration among Bulgarians about the gap in living standards with longer-standing EU countries.
Steep rises in the cost of fuel, basic utilities and public transport are adding to the discontent, and the country's debt - both personal and national - has left Bulgaria vulnerable to the credit crunch. These factors have hit share prices hard. The Sofia Stock Exchange is down 33.8 per cent.
INDIA
While the Indian stock market is down by almost a third over the past six months, the losses from January's peak are higher - above 40 per cent in local currency terms. The collapse of what was one of the top-performing markets of 2007 is a reflection of the growing concern over the state of the country's economy.
Inflation is now at record levels, above 11 per cent and just over twice the Reserve Bank of India's target rate. That spells an imminent further tightening in monetary policy in a country where interest rates have already risen significantly.
The problems of the Indian economy are not the only drag on the market -more than US$6 billion ($7.9 billion) of foreign investment has flowed out of Indian equities since the beginning of the year amid concern about over-valuations at the peak. There is, however, no shortage of fund managers who believe the market has been oversold.
TURKEY
First-quarter economic growth was 6.6 per cent and inflation came in below economists' expectations. So how come Turkey's stock market has fallen by 31.4 per cent this year?
The answer lies in the political instability facing the country, with Turkey's ruling partner facing a legal challenge over whether it should be banned for "anti-secular activities". While defeat would not necessarily spell the end for the Justice and Development Party's administration, investors have been spooked by the row.
A sharp decline in the Turkish lira, caused by the same issues, is adding to the market's woes.
GREECE
Greece is facing the same challenges as other Western economies, but its strong trades unions make wage restraint tough. The country is bracing itself for a series of strikes.
The stock market, down 31.2 per cent since the start of the year, has been a victim of serious outflows of foreign investment, as institutions have become increasingly risk-averse. Attracting that money back may be tough - the Greek government faces calls for reform of the high taxes on stock market transactions, but would find doing so politically tough.
ROMANIA
Romania is also blaming an absence of foreign investors for its stock market travails.
Local investors were shocked last week by the publication of a report from Julius Baer International Equity fund, previously the biggest foreign institutional investor on the Romanian capital market, which said it had not done one deal on the Bucharest Stock Exchange during the first four months of the year.
A pull-out of international investors has resulted in a 30.9 per cent collapse on the stock market this year.
- INDEPENDENT
