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Market Cap/GDP Ratios of 22 Nations

NIA has just significantly expanded its Market Cap/GDP Ratio analysis service by adding 8 new countries, which means it now allows you to analyze and compare the Market Cap/GDP Ratios of 22 different nations. NIA has also updated it so that Market Cap/GDP Ratios are now priced in each country’s national currency. All data is updated as of the end of February.

The 22 nations that are now tracked by NIA, currently have an average Market Cap/GDP Ratio of 111.8%, which is up 81.8% from their February 2009 post-financial crisis low of 61.5%, but still down 13.2% from their October 2007 pre-financial crisis high of 128.8%.

averagemarketcapgdpratio

The 5 countries with the highest current Market Cap/GDP Ratios are South Africa: 319.2%, Singapore: 261.6%, Switzerland: 230.8%, Taiwan: 182.5%, and the US: 155.2%.

The total market cap of all stocks listed on U.S. exchanges has just reached a new record high of $27.48 trillion vs. current U.S. GDP of $17.71 trillion – for a U.S. Market Cap/GDP Ratio of 155.2%, the highest U.S. Market Cap/GDP Ratio since October 2000. The current U.S. Market Cap/GDP Ratio of 155.2% is 34.4% above its 1991-2015 median of 115.5%.

The 5 countries with the lowest current Market/Cap GDP Ratios are Greece: 24%, Russia: 40.5%, New Zealand: 42.6%, Mexico: 43.7%, and Brazil: 46.3%.

Greece and Russia are the only two nations tracked by NIA that currently have Market Cap/GDP Ratios that are below their 1991-2015 median Market Cap/GDP Ratios. Greece’s current Market Cap/GDP Ratio of 24% is 33.8% below its median of 36.3%. Russia’s current Market Cap/GDP Ratio of 40.5% is 12.1% below its median of 46.1%.

South Korea’s current Market Cap/GDP Ratio of 96.5% is 144.4% above its 1991-2015 median of 39.47% – making it the only country to currently have a Market Cap/GDP Ratio of more than double its median.

currentvsmedianmarketcapgdpratio

Both Japan and South Africa finished the month of February with new record high Market/Cap GDP Ratios of 115.8% and 319.2%, respectively. Five nations currently have Market Cap/GDP Ratios that need to increase by less than 5% to reach new record highs: Indonesia, Mexico, Thailand, Taiwan, and Canada.

Four nations have current Market Cap/GDP Ratios that are less than half of their record highs: Greece -67.2% from record high, Russia -59.5% from record high, China -51.1% from record high, and Brazil -50% from record high.

currentvsrecordhighmarketcapgdpratio

Over the last six months, Russia and Greece, the two countries with current Market Cap/GDP Ratios that are below their 1991-2015 median Market Cap/GDP Ratios – have made major moves in the exact opposite directions. Russia’s Market Cap/GDP Ratio has increased by 25.4% over the last six months, making it the world’s #1 best performer vs. Greece’s Market Cap/GDP Ratio declining 33.3% over the last six months, making it the world’s #1 worst performer.

Greece has a Debt/GDP ratio of 175% vs. Russia’s Debt/GDP ratio of only 13.4%. Russia is sitting on huge FOREX reserves of $376.2 billion, enough to repay all of its public debt. Greece’s FOREX reserves are down to only $6.3 billion. Greece only has enough cash to cover three more months of its deficit spending – and has no chance of ever repaying its debt.

Greece over the past decade has averaged an annual government budget deficit of -9.24% of GDP vs. Russia averaging an annual government budget surplus of 1.55% of GDP.

marketcapgdpratio6monthpercentagechange

Russian stocks are extremely undervalued vs. US stocks. Russia has already experienced the worst of its financial crisis, but America’s largest financial crisis in history is still ahead. NIA expects Russian stocks to make tremendous gains over the next 12-24 months as the US stock market collapses.

The ratio between America’s Market Cap/GDP and Russia’s Market Cap/GDP reached a double-top in August and December of 4.59, and has since declined to 3.83. The last time it rose above 4.50 was back in late-2000/early-2001, when it peaked at 4.91 before declining to a record low in April 2006 of 1.37. Based on the 15-year median of 2.24 and America’s current Market Cap/GDP of 155.2%, look for Russia’s Market Cap/GDP to recover from its current level of 40.5% back up to 69.3% within the next 12-24 months.

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