WASHINGTON, D.C., March 9 -- A study by the International Finance Corporation (IFC) describes the trading systems, or microstructures, or seven emerging markets and discusses how microstructures influence the attractiveness of a market to investors.
The study looks at seven stock markets in six countries -- Bolsa Electronica de Chile, Bolsa de Mercadorian y Futuros (Sao Paulo), Bolsa Mexicana de Valores, Bolsa de Valores de Sao Paulo, Istanbul Stock Exchange, Jakarta Stock Exchange, and Stock Exchange of Thailand. It examines how market microstructures can play a significant role in both market success and individual security pricing, encouraging or discouraging participation in the market.
The study finds that market liquidity and the cost of trading is affected by the ways in which transactions are handled, the type of transactions that are permitted, and the information made available to various market participants. The study concludes that there are many similarities among the emerging markets. Particularly noteworthy is the trend toward automation, a reflection of the interest in market innovation that characterizes these markets.
An Introduction to the Microstructure of Emerging Markets (Discussion Paper No. 24) was written by Jack Glen of IFC's Economics Department.
IFC is a member of the World Bank Group and is the largest multilateral source of equity and loan financing for private sector projects in developing countries.
