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WASHINGTON, D.C., Feb. 1 -- In a now familiar pattern, emerging stock markets took eight of the top ten positions in a ranking of the performance of global equity markets, announced the International Finance Corporation (IFC) today. The top three places were taken by less well-known, evolving markets. The rankings, measured in U.S. dollars, appeared in a report titled "Emerging Stock Markets: 1992 in Review." Offsetting the advances, though, were the worst performing markets in the world, with nine of the bottom ten also being emerging markets. Even in the best performing markets, it was a tumultuous year that reminded many investors that these markets offer risks as well as rewards. For example, IFC's index for Latin America rose 34% from January to May, fell 29% by October, only to rally another 12% to end the year up by a net of 6%. Overall, IFC's Composite Index of twenty emerging markets fell 2.8% for the year. IFC, the private sector member of the World Bank Group, is the world's leading publisher of da
ta on stock markets in developing countries, including an extensive commercial data base on dozens of emerging markets. Of the emerging markets, the ones showing the greatest gains in U.S. dollar terms for the year were Jamaica (202%), Peru (125%), China (110%), Colombia (36%), Thailand (30%), Malaysia (25%), Jordan (20%), and Mexico (19%). The greatest declines were suffered in Zimbabwe (-62%), Turkey (-61%), Venezuela (-43%), Nigeria (-39%), Sri Lanka (-36%), Greece (-33%), Taiwan, China (-28%), and Argentina (-28%). "Emerging stock markets have come a long way in the past decade," said Sir William Ryrie, IFC Executive Vice President. In 1982, the emerging markets surveyed by IFC had a total market capitalization of about $86 billion. By the end of 1992, after major world equity market crashes in 1987 and 1990, the emerging stock markets as a group had increased to more than $740 billion, almost nine-fold in market capitalization. This doubled their share of world equity market capitalization from 3% to 6%.
A number of markets became more accessible to foreign investors in 1992, a trend that Mr. Ryrie sees continuing into 1993. Chile, Korea, the People's Republic of China, and Taiwan, China eased restrictions on foreign investment, while India announced that it would open its market to qualified investment institutions for the first time. "As strong as this growth has been," Mr. Ryrie said, "emerging markets will be able to retain and increase international investor confidence only if they can offer improved regulatory regimes, transparent market practices, standardized audit and accounting procedures, and efficient clearing and settlement arrangements." IFC is working closely with several regulatory agencies to achieve these objectives. IFC plans to publish its annual Factbook in May, with information on more than 70 stock exchanges in developing countries, including the new exchanges in China, Eastern Europe and the former Soviet Union. (30)
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