Portfolio Investment Funds : Assessing the Impact on Emerging Markets
Although portfolio funds account for only about 5 percent of the capitalization of emerging stock markets, these small infusions of capital, particularly foreign portfolio investment funds, have been responsible for jump starting the development of many of these markets. The main beneficiaries of this growth have been the local firms and investors who hold about 90 percent of emerging market stocks. This Note examines the key role played by the International Finance Corporation (IFC) in creating the portfolio funds industry and helping to put countries on the map for emerging market investors. By improving the price-earnings ratio, liquidity, and pricing efficiency of domestic markets, portfolio funds improve firms access to all equity capital in emerging markets, a factor critical for business growth in developing countries. The Note also outlines the benefits that flow to developing country entrepreneurs and investors as a result of this increased liquidity the stock market provides.
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| Language: | English |
| Published: |
World Bank, Washington, DC
1996-09
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| Subjects: | STOCK MARKETS, INVESTMENT PROMOTION, FOREIGN CAPITAL, FOREIGN INVESTMENTS, CAPITAL MARKETS, EQUITY INVESTMENTS, PRIVATE ENTERPRISES, INSTITUTIONAL INVESTORS, PORTFOLIO INVESTMENT FUNDS ACCOUNTING, AFFILIATED ORGANIZATIONS, BORROWING, BROKERS, CAPITAL FLOWS, CAPITALIZATION, DISCLOSURE, DOMESTIC MARKETS, EMERGING MARKETS, EQUITY CAPITAL, FOREIGN INVESTMENT, FOREIGN INVESTORS, GROWTH FUND, INITIAL PUBLIC OFFERINGS, INSTITUTIONAL DEVELOPMENT, INSURANCE, INVESTMENT BANKS, LIQUIDITY, MUTUAL FUNDS, PORTFOLIO, PRIVATIZATION, SAVINGS, SAVINGS RATES, SECURITIES, SECURITIES MARKETS, STOCKS, TRANSITION ECONOMIES, TURNOVER, VENTURE CAPITAL, |
| Online Access: | http://documents.worldbank.org/curated/en/1996/09/441457/portfolio-investment-funds-assessing-impact-emerging-markets https://hdl.handle.net/10986/11607 |
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