A new report claims prices on the EU stock market have risen on average 118 percent, giving evidence that despite financial difficulties across Europe and the US, the market is doing well.
The Halifax Financial Services Survey of the EU stock market has examined the movements in share prices across the 27 member countries of the European Union over a five-year period, from April 2003-April 2008.
According to the study equity prices on average have risen a huge 118 percent across the EU since 2003. The rate at which prices have increased is double that of the US share prices.
However the study reveals share prices in Bulgaria have risen the most in the past five years by a staggering 352 percent- in total this increase is 6 times greater than the growth of UK stock prices.
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Researchers maintain it is the newest EU countries, such as Bulgaria, that have performed the best over the past 5 years. Joining Bulgaria’s success is Romania who gained EU membership in 2007. Together Bulgaria and Romania gained the 1st and 3rd highest share price gains in the past 5 years.
“These countries have clearly benefited from greater capital flows, especially foreign direct investment and the further integration of their financial markets within the EU. This has boosted share prices substantially,” explains Martin Ellis, Halifax Financial Services chief economist.
Other results showed 8 out of the 10 fastest growing stock prices in the EU were countries from Eastern Europe; Including Lithuania at 309 percent and Romania at 299 percent.
Luxembourg however was recorded as the fastest rate of growth among EU countries based outside Eastern Europe with a growth percentage of 263 percent.
The report claims however that financial market difficulties continue to wreak havoc on the market performance in 2008. With the aftershocks of the US crisis still being felt in the markets, share prices in EU countries fell by an average of 14 percent since the beginning of 2008.
Ironically some of the EU’s newest countries have been the most effected from the US crisis, including Bulgaria (-36 percent), followed by Cyprus (-32 percent) and Romania (-29%).
“Despite the recent financial market difficulties, the long term performance of stock markets across the EU has been strong,” says Ellis.
The study warns those you are keen to invest in the stock market to be aware that investment prices can go up and down. It is therefore advised to speak with a financial adviser before deciding on investments on the stock market.