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Todd Moss, Vijaya Ramachandran, and Scott Standley : 

Todd Moss, Vijaya Ramachandran, and Scott Standley Why Doesn’t Africa get More Portfolio Investment? Frontier Stock Markets, Firm Size, and Asset Allocations of Global Emerging Market Funds

Why relevant?: 

Why relevant? Finance & development debate Push vs Pull determinants Inform efforts to promote cap flows Market failure? Market works?

Frontier equity markets: 

Frontier equity markets 15 mkts SA dominates Others small, low liquidity Few large blocks available But not unusual

Slide4: 

Log market capitalization vs. Log GDP

Slide5: 

Log value traded vs. Log market capitalization

Regional Funds: 

Regional Funds

Slide7: 

GEM fund investment, 1995-2005

Slide8: 

South Africa GEM investment, 1996-2004 (3 year moving averages)

Slide9: 

GEM investment in Frontier SSA (1996-2004, 3yr moving averages)

Slide10: 

Share of GEM investment vs. Log market capitalization No country with market cap under $50 bn receives more than 1% of total GEM investment Market cap = $50 bn

Slide11: 

Share of GEM investment vs. Log value traded Value traded = $10 bn No country with value traded under $10 bn receives more than 1% of total GEM investment

Slide12: 

Log GEM investment vs. Log market capitalization

Slide13: 

Log GEM investment vs. Log value traded

Slide14: 

Share of GEM funds vs. Log market capitalization

Slide15: 

Share of GEM funds vs. Log market capitalization >90% of funds and >$150 bn market cap Outgrown asset class <10% of funds and <$20 bn market cap

Slide16: 

Share of GEM funds vs. Log value traded

Slide17: 

Share of GEM funds vs. Log value traded >90% of funds and >$75-100 bn value traded Outgrown asset class <10% of funds and <$2 bn value traded

Why are SSA firms small?: 

Why are SSA firms small? Cost Structures, Firm-Level Average by Country (Eifert, Gelb and Ramachandran, 2005)

Why are SSA firms small?: 

Why are SSA firms small? Gross and Net Value Added per Worker, $ Adjusted (Eifert, Gelb and Ramachandran, 2005)

Why are SSA firms small?: 

Why are SSA firms small? Percentage of Annual Revenues Lost in Unofficial Payments (World Bank Investment Climate Assessments, various)

Conclusions: 

Conclusions Target regional funds Leverage JSE Focus on supply constraints/barriers to firm entry and growth Privatization? Private equity? SME finance?

END: 

END END

Slide23: 

Log GEM investment vs. Log market capitalization

Slide24: 

Share of GEM investment vs. Log market capitalization Market cap = $50 bn No country with market cap under $50 bn receives more than 1% of total GEM investment

Slide25: 

Log GEM investment vs. Log GDP

Slide26: 

Share of GEM funds vs. Log GDP

Slide27: 

Share of GEM funds vs. Log GDP >90% of funds and >$200 bn GDP 10%-90% of funds and $60-$200 bn GDP Outgrown asset class <10% of funds and <$60 bn GDP

Slide28: 

Share of GEM investment vs. Log GDP GDP = $100 bn No country with GDP under $100 bn receives more than 1% of total GEM investment