China tops the charts

It's been another frustrating year for investors in emerging markets. The MSCI Emerging Markets Index fell by over 4% in dollar terms, and earlier this month hit an 18-month low. Asia ex-Japan eked out a gain, but oil and commodity-exposed Latin America fell by 15% and eastern Europe bedevilled by its proximity to Russia fell by 36%.

It's a reminder once again that fast economic growth doesn't necessarily mean a strong stockmarket performance. China's domestic stocks, as represented by the Shanghai Composite index, have been the world's top performers this year, up almost 40% in dollar terms despite the slowdown in the Chinese economy.

This is partly because it's now possible for foreign investors to access the market via Hong Kong. Investors are also betting that the government will be rattled by weaker growth and so soon give the economy another shot of liquidity, by loosening rules on bank lending.

Pakistan and Egypt are economic recovery stories. Egypt is bouncing back from three years of turmoil, helped by reforms to the energy sector and a more coherent legal framework for foreign investment.

Pakistan has got its act together since the International Monetary Fund bailed it out last year. Inflation has fallen to an 11-year low of 4%, and annual GDP growth is running at 4%, the fastest in six years.

Its neighbour India has jumped as new prime minister Narendra Modi has signalled a new round of pro-market reforms.

Venezuela's tiny market has done well given that sliding oil prices mean it faces "an almost existential threat", as Allister Heath puts it in The Daily Telegraph. Government exchange controls mean investors can't move money out easily, so they buy stocks to give themselves a chance to beat galloping inflation.

Oil is also a recurrent theme at the bottom of this year's emerging-markets league. In Colombia it accounts for more than half of exports and a sixth of government revenues. In 2010, almost half Nigeria's crude went to America; by July this year, none did. In Russia, the trouble was oil and politics.

The latter was Greece's main failing this year. Its market lost 13% in a day when an early election raised the prospect of a government of left-wing populists. The Russian invasion of Ukraine, finally, has wiped out 10% of the country's income this year.