At this time a year ago, there was little cause to celebrate as the gravity of the global financial crisis unraveled and uncertainty filled the air. But, as the world says goodbye to 2009 and hello to 2010, governments, business owners and investors alike deserve a pat on the back for surviving the worst global economic downturn since World War II.

The first quarter of 2009 marked one of the most arduous quarters on record for the majority of economies, with the US, the world’s biggest economy, suffering its worst contraction in almost three decades. As unemployment rates continued to spike, consumer spending took a major blow resulting in reduced demand and the stockpiling of inventories. Earnings were paltry at best, and investors grew increasingly wary of the prospects for a global economic rebound. By the time March rolled around, it came as no surprise that major stock market indices had hit record lows.

But what a difference a few months can make. The US government lit a fire under the economy with initiatives such as the “cash for clunkers” programme and incentives for first time homebuyers. Resultantly, after four consecutive quarterly contractions, the nation finally crawled its way out of the downturn with Gross Domestic Product (GDP) expansion of 2.2 per cent, led by consumption growth of 2.8 per cent. Improved economic data on the housing and labour markets soon followed fueling greater investor optimism.

Emerging economies continued to be the fastest growing this year, with China, leading the pack. The populous nation achieved third-quarter economic expansion of 8.9 per cent, up from 7.9 per cent in the second quarter and is predicted to record growth of at least 8 per cent for the full-year. China’s close trading partner, Brazil has also proven its resilience being one of the last countries to enter the recession in the first quarter of this year. The nation made a strong comeback soon after with GDP growth of 1.9 per cent in Q02 2009 from the previous quarter. Latin America’s biggest country is expected to record flat growth this year, beating out the US which is forecasted to contract at a pace of over two per cent.

Despite a slower-thanexpected recovery in the US, renewed investor confidence in the global economic rebound helped the Standard & Poor’s 500 Index (S&P 500) and the Dow Jones Industrial Average (DJIA) regain momentum by the year’s end. The S&P 500 is up 66.7 per cent from a twelve-year closing low set on March 9, 2009. As at December 28, 2009, the broad market measure has risen 29.79 per cent and is on track for possibly its strongest year since 2003. Likewise, the DJIA rebounded from its March 2009 LO of 6,547.05, gaining 61.1 per cent. For 2009, the Index is up 24.52 per cent.

Investors who took SSL’s advice to get in the equity market especially during the first half of 2009, should be smiling all the way to the bank as many fundamentally sound Companies are now trading at or close to 52-week highs on improved financial results and increased growth prospects. One such Company is iPhone maker, Apple Inc (NASDAQ: AAPL), which has seen its stock price more than double over the past year to US$211.61 (close price on December 28, 2009) from US$86.61 a year ago on continued robust results. Similarly, Brazilian oil giant, Petroleo Brasileiro SA (NYSE: PBR) has seen its stock price surge to US$47.97 from US$22.40 on December 29, 2008. Apart from investors, a few Companies were brave enough to take the plunge and use the global downturn as an opportunity to expand at a time when many Firms were valued at a discount. For example, in October, Pfzier Inc (NYSE: PFE) completed its acquisition of Wyeth Inc solidifying its position as the world’s biggest drug Company. The deal was made at a price tag of US$68 billion, the biggest merger the pharmaceutical industry has seen since 2000. Network equipment maker, Cisco Systems Inc (NASDAQ: CSCO) also continued to beef up its portfolio, gobbling up a total of seven Companies during the year.

Locally, Jamaica had its fair share of trials during 2009 which was to be expected since its biggest trading partners suffered amid the downturn. However, as these economies have begun to pick up, Jamaica is poised to benefit and there is potential for a more prosperous 2010. Already there has been renewed investor interest in the local market given the prospect of an improved economic environment.

In fact, the Jamaica Stock Exchange (JSE) Main Index has rebounded from its 52-week LO of 78,482.98 set on April 1 2009, gaining 5.49 per cent to 82,791.70 (close on December 28, 2009) on strong results for the quarter ended September 30, 2009. Of the thirty-two Companies with ordinary shares listed on the JSE that released results for the quarter ended September 30, 2009, twenty-six Firms or 81 per cent posted a profit, while eighteen out of those twenty-six were able to increase earnings compared with the year-ago period. Sagicor Life Jamaica Ltd (SLJ) has turned out stellar results for the first nine months of the year, helping lift the stock 51.02 per cent to $7.40 (close price on December 28, 2009).

Though there hasn’t necessarily been a rise in mergers and acquisitions during the year, there has been an uptick in Initial Public Offerings (IPOs), which is also a positive sign for the local economy. Access Financial Services Ltd (AFS) became the first Company to list on the JSE Junior Market. Another financial Firm, Barita Investments Ltd completed its IPO on December 18, 2009 and is expected to list on the JSE by the second week of January 2010.

While 2009 turned out to be much better than expected, economies are still not completely out of the woods as there is still work to be done to ensure sustainability. Certainly it is hoped that 2010 will bring growth and prosperity, however it will require continued discipline and resolve by governments, consumers and investors alike.

Kimberly Thelwell is a Research Analyst at Stocks & Securities Ltd. You can contact her at kthelwell@sslinvest.com.