Global Financial Data has put together a unique collection of alternative data indices that chart the performance of stocks in dozens of different countries around the world. The first company for which Global Financial Data has data, the Dutch East India Co., was founded so the Dutch could develop resources in Indonesia and the rest of Asia. This company was followed by the Dutch West India Co., the English East India Company, the French East India Co., the Hudson Bay Co. and dozens of others. Throughout the 1600s and 1700s, developing the resources of emerging markets was the main reason many of these companies existed. During the 1800s, however, European countries established corporations that had the right to build railroads, establish banks, mine, and purchase and develop land. Each country established companies to develop resources in their colonies, Britain in India and Australia, the Netherlands in Indonesia (Netherlands Indies), France in French Indochina and French West Africa, Belgium in the Congo, and so forth. Today, if you want to invest in Emerging Markets, you can either buy an ETF that specializes in a particular country or region, or you can purchase ADRs that provide you ownership in that company. In the 1800s, there were no ETFs that allowed you to invest in different colonies or regions, but you could buy shares in companies that invested in emerging markets. These shares were liquid and readily available on the London Stock Exchange. There were numerous bubbles that attracted British and other investors to emerging markets before World War I. The first occurred in 1825 when Latin American companies caught the eyes of investors. French railroads raised money in London in the 1840s, Australian mining stocks exploded in 1852, American railroads attracted investors in the 1870s and 1880s and in the 1890s, South African gold mining companies traded on the London, Paris and Berlin stock exchanges. The Suez Canal was one of the largest companies that listed in Paris and the Panama Railroad was a prime subject of speculation in the 1850s as gold diggers made their way from the east coast of America to California. The London Stock Exchange is so rich in its history that you might feel like an archaeological explorer who has discovered Tutankhamun’s tomb once you start investigating the data. In most of the countries, shares listed in London before stock exchanges established in those countries. Since the gold standard fixed exchange rates between European countries after 1870, shares of American railroads or South African mining companies traded simultaneously in London, Paris, Amsterdam, Berlin, Brussels and Vienna. Until 1914, buying and selling government bonds or the bonds of American railroads was one of the principal ways that money moved between countries to arbitrage exchange rates between European countries. The coverage varies tremendously between different countries. Some countries, such as Costa Rica or Ethiopia, may only have one company that traded in London, but other countries, such as Australia, Malaysia, South Africa or the United States might have over 100 companies that traded in London between 1825 and 1985. Global Financial Data has collected the price of shares, the number of shares outstanding and corporate actions so market cap-weighted price and total return indices can be calculated for each country. The data allows us to calculate indices not only by country, but by region. We can compare the performance of developed and emerging markets as well as by sector. Were emerging markets good investments in the 1800s or poor investments? Did the returns to emerging markets exceed returns to British or American companies? Did people in emerging markets benefit from the railroads, banks, mining and other companies that were developed, or as Marx or Gandhi would have it, did these companies channel all their profits back to European investors and leave nothing for the colonies? Over 2300 companies that listed in the United Kingdom and the United States are included in GFD’s London Stock Exchange indices. Certainly, no one who wants to understand the performance of the stock market in the past or of emerging markets in general should ignore this data. The results can be compared directly with the returns to the United States and United Kingdom using the GFD US-100 and GFD UK-100 indices. The data from London and New York are daily in their periodicity so the exact timing of bull and bear markets can be studied in detail. Once you have analyzed the indices that have been calculated for each country or sector, you can analyze the performance of the underlying companies that make up the indices to discover the sources of changes in the data. The GFD Indices provide a rich resource of alternative data that is available from no other source and can be a rich resource for finding sources of alpha for investors. To help potential users understand the richness of this data set, Table 1 provides information on the indices that have been calculated for each country. The table details when the index for each country begins and when it ends. It tells the number of companies that are included in the indices as well as the maximum market cap of the companies that were listed in London. If you currently do not subscribe to the GFD Indices, you are missing out on a rich opportunity to analyze the past and possibly obtain a better understanding of the performance of emerging markets in the future. Table 1. GFD Indices of Companies Listed in London and New York, 1825 to 1985
| Country | Begins | Ends | Companies | Max Market Cap | Year |
|---|---|---|---|---|---|
| Argentina | 1865 | 1985 | 69 | 749.0 | 1929 |
| Australia | 1825 | 1985 | 201 | 12,550.0 | 1981 |
| Austria | 1856 | 1932 | 6 | 27.0 | 1906 |
| Belgium | 1845 | 1985 | 8 | 21.0 | 1875 |
| Bolivia | 1825 | 1985 | 8 | 100.0 | 1929 |
| Brazil | 1825 | 1984 | 60 | 2,563.0 | 1984 |
| Canada | 1825 | 1985 | 100 | 19,278.0 | 1976 |
| Chile | 1852 | 1969 | 46 | 815.0 | 1929 |
| China | 1882 | 1930 | 7 | 38.0 | 1925 |
| Colombia | 1825 | 1962 | 21 | 33.0 | 1920 |
| Costa Rica | 1886 | 1932 | 1 | 1.3 | 1890 |
| Cuba | 1838 | 1961 | 23 | 135.0 | 1926 |
| Denmark | 1853 | 1984 | 4 | 40.0 | 1937 |
| Ecuador | 1924 | 1975 | 1 | 2.3 | 1944 |
| Egypt | 1856 | 1969 | 23 | 918.0 | 1929 |
| El Salvador | 1887 | 1985 | 4 | 5.4 | 1978 |
| Ethiopia | 1908 | 1924 | 1 | 0.2 | 1920 |
| France | 1801 | 1985 | 53 | 881.0 | 1890 |
| Germany | 1835 | 1985 | 17 | 7,647.0 | 1985 |
| Ghana | 1869 | 1985 | 21 | 175.0 | 1936 |
| Greece | 1839 | 1930 | 3 | 15.0 | 1911 |
| Guatemala | 1923 | 1963 | 2 | 10.0 | 1956 |
| Guyana | 1845 | 1921 | 1 | 0.1 | 1895 |
| Hong Kong | 1865 | 1985 | 6 | 272.0 | 1969 |
| India | 1792 | 1985 | 156 | 530.0 | 1865 |
| Indonesia | 1891 | 1981 | 40 | 157.0 | 1980 |
| Ireland | 1792 | 1985 | 87 | 402.0 | 1877 |
| Italy | 1848 | 1985 | 19 | 78.0 | 1927 |
| Jamaica | 1907 | 1985 | 6 | 3.0 | 1967 |
| Japan | 1907 | 1985 | 44 | 68.0 | 1913 |
| Kenya | 1907 | 1970 | 7 | 31.0 | 1966 |
| Malaysia | 1889 | 1985 | 212 | 3,373.0 | 1981 |
| Mauritius | 1854 | 1915 | 5 | 2.0 | 1878 |
| Mexico | 1824 | 1985 | 61 | 2,112.0 | 1989 |
| Mozambique | 1895 | 1975 | 2 | 3.5 | 1928 |
| Myanmar | 1890 | 1977 | 6 | 95.0 | 1937 |
| Netherlands | 1845 | 1985 | 25 | 19,106.0 | 1985 |
| New Zealand | 1862 | 1980 | 32 | 219.0 | 1974 |
| Nicaragua | 1863 | 1891 | 2 | 3.3 | 1864 |
| Nigeria | 1887 | 1976 | 34 | 53.0 | 1965 |
| Paraguay | 1889 | 1965 | 3 | 10.0 | 1965 |
| Peru | 1825 | 1975 | 13 | 317.0 | 1968 |
| Philippines | 1889 | 1985 | 10 | 954.0 | 1980 |
| Portugal | 1855 | 1981 | 8 | 13.0 | 1922 |
| Romania | 1870 | 1940 | 3 | 10.0 | 1914 |
| Russia | 1865 | 1932 | 22 | 80.0 | 1917 |
| Singapore | 1895 | 1977 | 5 | 6.0 | 1969 |
| South Africa | 1833 | 1985 | 379 | 54,785.0 | 1980 |
| Spain | 1845 | 1985 | 21 | 90.0 | 1913 |
| Sri Lanka | 1842 | 1984 | 57 | 151.0 | 1927 |
| Sweden | 1853 | 1985 | 21 | 334.0 | 1929 |
| Switzerland | 1872 | 1930 | 1 | 0.5 | 1928 |
| Thailand | 1919 | 1970 | 2 | 11.5 | 1964 |
| Trinidad | 1865 | 1985 | 8 | 741.0 | 1980 |
| Turkey | 1856 | 1930 | 11 | 38.0 | 1929 |
| United States | 1821 | 1985 | 198 | 4,584.0 | 1926 |
| Uruguay | 1873 | 1971 | 10 | 30.0 | 1928 |
| Venezuela | 1852 | 1971 | 15 | 305.0 | 1948 |
| Zimbabwe | 1893 | 1985 | 43 | 108.0 | 1985 |
25 years ago: February 1994
S&P 500: 467.14 (vs. 2731.61 in 02/2019) 10-year U.S. Government Bond Yield: 6.15% (vs. 2.70% in 02/2019) Gold: $381.55 (vs. $1312.40 in 02/2019) Oil: $14.50 (vs. $53.94 in 02/2019) GBP/USD: 1.485 (vs. 1.2932 in 02/2019) US GDP: 7,013 billion (vs. 20,658 billion in 09/2018) US Population: 260 million (vs. 328 million in 2019) 02/03/1994: The Mexican Peso crisis begins. 02/05/1994: Byron De La Beckwith is convicted of the 1963 murder of civil rights leader Medgar Evers. 02/06/1994: The Fed's decision to raise short-term interest rates for the first time in nearly five years pushes the Dow Jones Industrials more than 96 points lower. 02/12/1994: Four men break into the National Gallery of Norway and steal Edvard Munch's iconic painting The Scream.50 years ago: January 1969
S&P 500: 98.13 (vs. 2731.61 in 02/2019) 10-year U.S. Government Bond Yield: 6.26% (vs. 2.70% in 02/2019) Gold: $42.70 (vs. $1312.40 in 02/2019) Oil: $3.06 (vs. $53.94 in 02/2019) GBP/USD: 2.3918 (vs. 1.2932 in 02/2019) US GDP: 968 billion (vs. 20,658 billion in 09/2018) US Population: 205 million (vs. 328 million in 2019) 02/10/1969: Heavy snow forced closings of NYSE and ASE, the first such weekday closing by Big Board in this century. Only other all-day closing was Saturday in January, 1948, due also to snow. 02/12/1969: Pittsburgh Stock Exchange members voted merger with Philadelphia-Baltimore-Washing Stock Exchange. 02/26/1969: Federal Reserve restated determination to tighten credit to cool economy.100 years ago: February 1919
S&P 500: 8.0471 (vs. 2731.61 in 02/2019) 10-year U.S. Government Bond Yield: 4.70% (vs. 2.70% in 02/2019) Gold: $20.67 (vs. $1312.40 in 02/2019) Oil: $4 (vs. $53.94 in 02/2019) GBP/USD: 4.7575 (vs. 1.2932 in 02/2019) US GDP: 84 billion (vs. 20,658 billion in 09/2018) US Population: 104 million (vs. 328 million in 2019) 02/05/1919: Charlie Chaplin, Mary Pickford, Douglas Fairbanks, and D.W. Griffith launch United Artists. 02/06/1919: General Strike at Seattle. Many strikes and much labor unrest. 02/14/1919: Polish Soviet War: The Polish army attacked Soviet forces occupying the town of Biaroza. 02/21/1919: German socialist Kurt Eisner is assassinated. His death results in the establishment of the Bavarian Soviet Republic and parliament and government fleeing Munich, Germany. 02/25/1919: Oregon places a one cent per U.S. gallon tax on gasoline, becoming the first U.S. state to levy a gasoline tax.200 years ago: February 1819
GFD US-100/S&P 500: 0.5752 (vs. 2731.61 in 02/2019) 10-year U.S. Government Bond Yield: 4.65% (vs. 2.70% in 02/2019) Gold: $19.39 (vs. $1312.40 in 02/2019) GBP/USD: 4.384 (vs. 1.2932 in 02/2019) US GDP: 726.677 million (vs. 20,658 billion in 12/2018) US Population: 9.379 million (vs. 328 million in 01/2019) 02/15/1819: Simon Bolivar Palacious became President of Colombia 02/17/1819: The United States House of Representatives passes the Missouri Compromise for the first time. 02/22/1819: Treaty concluded with Spain, ceding Florida to the United States.300 years ago: February 1719
UK Government Bond Yield: 4.10% (vs. 1.34% in 01/2019) UK GDP: £80 million (vs. £535 billion in 12/2018) UK Population: 6 million (vs. 66 million in 01/2019) 01/03/1719: Compagnie des Indes shares hit 475 Francs and will rise to 10,000 Francs on November 21, 1719 during the Mississippi Bubble. © 2019 Global Financial Data. Please feel free to redistribute this Events-in-Time Chronology and credit Global Financial Data as the source.
Global Financial Data has added the UK-100 Index to its family of GFD Indices. The UK-100 index (GFUK100MPD) provides a DAILY index of stocks from the London Stock Exchange that begins in 1692 and ends in 1985. The index has a base of 12/31/1983 = 1000 so the index can be linked up to the FTSE-100 index and provide over 325 years of daily data on British stocks. With over 87,000 data points, the UK/FTSE-100 index provides more stock market history than any other index on the planet. The Index is available not only as a price index, but as a return as well. The GFD UK-100 Index provides an unparalleled history not only of the London Stock Exchange, but of the entire financial world. Hundreds of companies from around the world listed on the London Stock Exchange in the 1800s and 1900s as London funded the growth of the global economy. The FTSE-100 provides daily data back to 1984 and the FT-30 Industrials provides daily data back to 1935. The GFD UK-100; however, provides a daily, market-cap weighted index of British stocks that traded in London from 1692 to 2018 and includes over 87,000 data points to help analysts understand the performance of the stock market over the past 327 years. We have divided up the history of the London Stock Exchange into four eras: Monopolies (1692 to 1805), Free Trade (1806 to 1914), the Great Reversal (1914 to 1974) and Globalization (1975-). Each of these eras represented different attitudes of the government toward the stock market. This directly affected the performance of stocks, bonds and bills. We noted that the most significant change in the stock market occurred in 1914 when the government began its extensive intervention in the economy and the stock market which continues today. Between 1692 and 2018, stock prices increased at an average rate of 2.00% per annum before inflation and 0.50% after inflation, and with reinvested dividends averaging 4.63% per annum, investors received a total return of 6.72% per year. £1 invested in stocks in 1692 grew to £31.358 million in 2018 and with reinvested dividends grew to £1.817 billion assuming no taxes and full reinvestment. By contrast £1 invested in government bonds grew to £1.208 million between 1700 and 2018 and £1 invested in bills grew to £793,891 between 1694 and 2018. The equity risk premium over the past 327 years was 2.29%. Whereas most analysis of the dividend yield and equity-risk premium rely upon less than 100 years of data. The GFD UK-100 Index not only provides 327 years of data to calculate the risk premium, but provides information on how it changed over time. The best annual performance was 1975 when the market rose 127.69% and the worst was in 1974 when the market fell 50.61%. The GFD UK-100 also provides a detailed history of the 25 bear markets that have occurred in London over the past 327 years as well as how the market capitalization increased from under £1 million in 1692 to over £2.5 trillion at the beginning of 2018. The composition of the market has switched from being composed of three companies in the 1700s to one dominated by transport and finance companies in the 1800s to one in which no sector dominates the market today. London was the financial center of the world from 1692 until 1914 when the cost of fighting World War I forced London to cede the title to New York. London remains the center of Europe’s financial markets today which, despite the current battles over Brexit, it will likely maintain for the rest of the century. The GFD UK-100 index provides a unique record of London’s equity markets over the past 327 years. You can read the full article here.
