Emerging Stock Markets Factbook 1991

9772 In .- CTlDws Public Disclosure Authorized Public Disclosure Authorized International Public Disclosure Authorized Finance Corporation t >;f 0eJE&< f@ Public Disclosure Authorized *- 9 E* .7 j* Emerging Stock Markets Factbook 1991 Emerging Stock Markets Factbook 1991 International Finance Corporation Washington, D.C. © 1991 International Finance Corporation 1818 H Street, N.W., Washington, D.C. 20433 • All rights reserved. May not be reproduced in whole or in part by any means without the written consent of the International Finance Corporation. • This information is based on data obtained from sources that the IFC considers to be reliable, but is not guaran- teed as to accuracy and does not purport to be complete. • This information shall not be construed, implicitly or explicitly, as containing any investment recommendations and, accordingly, the IFC is not registered under the U.S. Investment Advisers Act of 1940. This information does not constitute an offer of or an invitation by or on behalf of IFC to purchase or sell any of the shares mentioned, nor should it be considered as investment advice. • The denominations and geographical names in this publication are used solely for the convenience of the reader and do not imply the expression of any opinion whatsoever on the part of the IFC, the World Bank or other affiliates, concerning the legal status of any country, territory, city, area, or of its authorities, or concerning the de- limitation of its boundaries or national affiliation. * The IFC may, from time to time, have a financial interest in the securities mentioned or included in the calculation of the IFC Indexes. * The Emerging Markets Data Base is a service of the IFC's Capital Markets Department. The views expressed are those of the authors and do not necessarily reflect policies of the IFC or its affiliates. Published in the United States of America, May 1991 ISSN 1012-8115 ISBN 0-8213-1826-8 iv Emerging Stock Markets Factbook Contents Introduction vii IFC's Emerging Markets Data Base viii The International Finance Corporation ix Glossary x Abbreviations xi Acknowledgments xii 1. Overview of Emerging Markets 1 Trends in Emerging Markets 2 Market Size and Liquidity 49 Comparative Valuations 63 Country Funds 65 Indicators of Market Quality 68 Exchange Rates 71 2. Stock Market Indexes 77 IFC Index Methodology 78 Principal Industries in the IFC Indexes 82 Total Return Indexes 86 Price Indexes 96 3. Equity Market Profiles 113 Markets in IFC's Composite Index 114 Markets not in IFC's Composite Index 154 4. Directory of Stock Exchange Operations 169 EmergingStock MarketsFactbook v Introduction This is IFC's fifth Factbook on the stock The Factbook is divided into 5 sections: markets of developing countries. The series is the first to pull together in one volume the * Introduction: background on the various time series of fundamental market Intemational Finance Corporation data on the leading stock markets of the de- and its Emerging Markets Data veloping world. It puts these markets in per- Base; spective with their own domestic economies * Overview of Emerging Markets: and compares them to markets in the devel- commentaries, tables and charts on oped world. numerous statistical fundamentals of both developed and developing The Factbook is designed to serve as a markets; reference work for use by institutional inves- * Stock Market Indexes: a descrip- tors, investment bankers, academics, econo- tion of the methodology of the IFC mists and joumalists. Many of the tables and Indexes plus informnationon the per- charts draw on data from more than 40 formance of stock markets as mea- emerging markets, unlike previous years' sured by the IFC Indexes and the Factbooks, which focused almost exclusively most commonly used local market on the larger markets included in IFC's Com- indexes; posite Index. * Equity Market Profiles: a statistical look at 33 emerging markets; New to this year's Factbook are an in- * Directory of Stock Exchange troductory essay on the role stock markets Operations: a listing of the princi- play in economic development, commentar- pal officers, addresses, hours of op- ies on each market's activities in 1990 with eration and holidays in 1991 of more highlights for the first quarter of 1991, and than 50 stock exchanges in the de- a look at trends in the 1990s. In 1990, veloping world. Indonesia became the 20th market in IFC's Composite Index, and it appears in this Unless stated otherwise, all indexes and edition with substantially more data than currency data are shown in U.S. dollars; cur- in previous editions. rency amounts are shown in millions. EmergingStock MarketsFactbook vii IFC's Emerging Markets Data Base The IFC Emerging Markets Data Base is indexes of stock market performance avail- the first comprehensive data base to provide able today that are calculated in a consistent detailed statistics on stock markets in devel- manner for a large number of developing oping countries. International investors can countries. In some cases, the weekly and purchase securities, directly or indirectly, in monthly index series for the same period may most of these markets, with a growing trend not be identical because of more frequent to reduce restrictions. But information on compounding in the weekly series. these markets is scarce and often not consistent from one period to another or one market The indexes are weighted by market to the next. The data base is part of IFC's ex- capitalization using a formula based on the panding line of products to disseminate infor- chained Paasche method. For a detailed dis- mation, serving its mandate of seeking to cussion of the indexes calculation, see the stimulate the flow of private capital, both do- section on "Index Methodology" in Chapter mestic and foreign, into productive invest- 2. Price indexes are derived from changes in ment in developing countries. prices, adjusted for changes in capitalization. The Total Return indexes include changes Using a sample of stocks in each market, from adjusted prices as well as cash divi- the data base includes weekly and monthly dends received and dividends implicit in statistics on more than 800 stocks from 20 rights issues with a subscription price below markets, in many cases going back as far as the prevailing market price. The IFC Latin 1975. To establish representative indexes for America, Asia and Composite Indexes follow stock market performance, IFC selects stocks the same methodology but treat all stocks in based on trading activity, market size and sec- the group of markets as if they were in a sin- toral diversity. gle market. IFC has established a network of corre- In addition to this Factbook, IFC pub- spondents in each market who provide the lishes a Quarterly Review and a Bibliography data on a regular basis. These correspondents of reports covering equity markets in devel- include local brokers, investment banks, oping countries. The data in these reports and stock exchanges and regulatory authorities. the underlying data on individual companies For each market, IFC calculates two types of come from the Emerging Markets Data Base, indexes, a price index and a total returns in- which IFC offers as a commercial service to dex. These indexes appear weekly in the in- subscribers. ternational financial press and are the only viii EmergingStock MarketsFactbook The International Finance Corporation The International Finance Corporation writing and investing IFC's capital in these (IFC), an international organization, was es- funds. tablished in 1956 to promote the economic growth of its developing member countries In 1984, for example, the IFC helped es- through private sector investment. It is the tablish the Korea Fund, Inc., a mutual fund world's largest multilateral organization pro- that is listed on the New York Stock Ex- viding financial assistance in the form of change, with an initial value of US$100 mil- loans and equity to the private sector in devel- lion. Since then, the IFC has brought over 25 oping countries. Its capital resources are pro- local, regional, and global funds to the mar- vided by its more than 130 member countries, ket. The IFC is currently also working on a which collectively determine the Corpora- number of investment fund transactions in tion's policies and activities through a Board several countries involving both new cash of Governors. and debt conversion schemes. The Capital Markets Department of the Through its underwriting and private IFC is the focal point of financial market de- placements, the IFC has been involved in as- velopment activities of the IFC and the World sisting corporate clients raise financing Bank. With years of accumulated experience, through offerings of their securities, such as its specialized staff maintain consistent con- equity and convertible debt issues as well as tacts with senior government officials and floating rate note and Euro-commercial paper leaders of financial institutions and markets issues, in the international capital markets. in the developing world. Altogether, in recent years, IFC has also been involved as an underwriter of more than three The IFC pioneered the linkage between dozen domestic private securities issues from international and developing countries' capi- developing countries. tal markets through the use of international investment funds. Its role in establishing in- The Emerging Markets Data Base was temational funds has typically involved: dis- developed as part of this activity, to provide a cussions with host country authorities on the fim foundationfor its investmentprogram and appropriate legal and regulatory framework, advisory activities. Begun in 1981, the data structuring of the funds to ensure profession- base has become one of the world's leading al and independent management, and under- sources of information on emerging stock markets. EmergingStock Markets Factbook ix Glossary Billion: 1,000 million.

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