EquitiesPresentation

 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