21986 Vol. 3 No.4 ^\IELOP-ING 4 A 'WORLD ~BANK QUARTERLY . .; . . ..~~FL COPY ..................... Despite an increase in international interest Equity portfolio and foreign rates, financial flows to emerging markets rose direct investment strongly in the second quarter of 1996. Bond is- suances reached a new high, loan commitments Emerging stock markets 1 2 fell only slightly, and foreign direct investment The IFC's investable composite index rose 3.3% (FDI) inflows continued to rise after the record in the second quarter, but plunged in July as US year in 1995. Market confidence in the economic markets soured. programs of key developing countries appears to have increased: bond spreads declined and ma- New equities 1 5 turities lengthened, the prices of secondary mar- New equity issues fell in the second quarter but ket debt instruments rose, new issuers achieved picked up again in July. Emerging markets took investment-grade ratings, and the International a sizable share of the record funds flowing to US Finance Corporation's (IFC's) Investable Com- stock market funds. Funds were launched to in- posite Index of emerging stock markets rose vest in Africa, Asia, Egypt, Eastern Europe, and 3.3% (although July's fall in US markets hit Latin America. emerging markets hard). Issues of new equity did decline in the quarter, largely because of a lack Foreign direct investment of privatization activity. For developing countries and privatization 1 7 dependent on official flows, the news was bleak, Global FDI soared to a record $325 billion in with official development assistance from OECD 1995, with $97 billion going to developing coun- countries in 1995 falling to its lowest share of tries. Emerging markets are a growing source of these countries' GNP since the UN adopted the FDI outflows, particularly the Republic of Korea. target of 0.7% in 1970. Privatization through public offers was off to a slow start in 1996. International lending and Official flows capital markets Multilateral flows 19 Bonds 4 World Bank commitments dropped slightly in Bond issuances jumped by 17% to $23.3 billion, the fiscal year endingJune 30, 1996, while MIGA a new record. Maturities lengthened, spreads de- showed a strong increase in coverage. Multilat- clined, and the shares of the dollar market and eral commitments rose in the second quarter. of fixed-rate issues continued to rise. Secondary market prices gained strongly. Bilateral ODA and export credits 20 Commercial bank loans 8 In 1995 ODA from members of OECD's Devel- Loan commitments declined slightly in the sec- opment Assistance Committee fell to 0.27% of ond quarter to $23.2 billion, with Asia taking these countries' GNP, the lowest level since the 62%. Project finance activity was revised upward UN adopted a target of 0.7% in 1970. for the first quarter, and declined in the second quarter as maturities shortened sharply. Debt relief update Market creditworthiness I I Official creditors 21 SloveniareceivedAratingsforitsmaidenEurobond The Paris Club reached stock agreements with issue; Indonesia received an A+ rating for local cur- Burkina Faso, Guyana, Mali, Peru, and Russia, rency debt; Romania received lower ratings; and and a flow agreement with the Congo. Nicaragua Venezuela's prospects improved. restructured its debt to Russia. Financial Flows and the Developing Countries Contents and summary Commercial creditors Russia reached an agreement in principle with Letter to readers the London Club to restructure its commercial bank debt. We have made a number of changes in data coverage and Financial brief: Stock presentation in this issue to increase the amount of markets and development information we provide and to focus the discussion on the events of the preceding quarter. A recent World Bank research project investi- Major changes include expanding the analysis of loans by gated the impact of stock markets on economic relying on more current data, presenting additional figures, growth and firms' financing decisions. and providing more detailed information on loan transac- tions; increasing the amount of information provided on Statistical appendix bond transactions; providing a summary of the major events Tables on external debt and aggregate long- in financial markets during the quarter; offering more com- term resource flows are published only as data are updated. prehensive data on commitments by multilateral creditors; and adding more detailed appendix tables on bond, loan, New bond issues 1 and equity transactions. The only item we cut was the section on commercial bank provisioning and capital adequacy, be- New loan issues cause it no longer gave much insight into lending to devel- oping countries. New equity issues Efforts will continue over the coming issues to make Fi- Bank and trade-related nancial Flows and the Developing Countries the top source for nonbank claims <' data and analysis on how financial markets are affecting the developing world. I welcome your comments on these Commercial bank claims changes and suggestions for further improvements. Please on developing countries - call me at 202-473-0138 or send me an e-mail at Commercial bank claims wshaw@worldbank.org. I look forward to hearing from you. on developing countries, William Shaw, Editor by country of origin Maturities of bank claims on developing countries Funds raised on international c\C ' capital markets .%. otC Secondary market debt (bid) o egAPt prices =t-Ot,43 Emerging stock markets Foreign direct investment flows RECONSTRUCToN FO Country groups &L U 1 INTEpIL "LIAPv NTIONAL e3ANK,gust1996f Bonds Brazil raised $3.5 billion, including $229 mil- lion from two debut issues by the government in Developing-country bond issues the escudo and pound sterling markets, both continue upward trend with three-year maturities and relatively narrow Developing-country bond issuances hit a record spreads. Companhia Energetica de Sao Paulo of $23.3 billion in the second quarter of 1996, a raised $714 million in the deutsche mark market 17% increase over the first quarter (table 1). This with a fixed-rate note with five years to maturity jump occurred despite an upturn in interest and a spread of 398 basis points. Electobras rates in core European, Japanese, and US mar- raised $250 million in the dollar market with an kets. The US bond market was particularly eight-year fixed-rate bond and a 10% coupon volatile, with stronger than expected employ- rate at a spread of 338 basis points at launch. ment reports sparking inflation fears among Issues from Argentina totaled $3.1 billion, in- market participants and sending long-term in- cluding $2.5 billion of sovereign issues. Ar- terest rates to 7% by the end ofJiine, compared gentina was most active in the yen and deutsche with 6% inJanuary. The biggest increase in issues mark markets, and was also the first Latin Amer- came from the private sector, with an increase of ican country to issue a guilder-denominated nearly two-thirds over the first quarter. By con- bond. The republic has been extending the ma- trast, sovereign borrowing fell about 5% and turity of its issues in the deutsche mark market public borrowing was up 4%. (during the quarter it placed a 15-year issue that Latin American borrowers were the major raised $325 million), establishing a good track players in the quarter, raising $12.3 billion. record in the short-term to build investors' con- Sovereign borrowers accounted for about half fidence in longer-term paper. Investors also re- that total. At $4.3 billion Mexico topped the sponded favorably to the reversal of a decree bond league table, followed by Brazil ($3.5 bil- requiring all private sector Eurobond issues to be lion) and Argentina ($3.1 billion). During the registered, which had been intended to reduce quarter the United Mexican States raised $2.7 tax avoidance by Argentine nationals. Chile billion in the dollar and yen markets at improved spreads relative to previous issues. In the US mar- Bond issues by type of borrower ket Mexico raised $1.75 billion with a global US$ rrillions 1996 1996 bond at a 552-basis point spread and a ground- 1994 1995 Ql Q2 breaking 30 years to maturity issue-the longest All developing countries 50,129 57,843 19,835 23 254 maturity achieved by Mexico since the 1980s Prvote 21,010 20,489 6,050 9,807 Sub-Saharan Africa 75 100 250 0 debt crisis. The new issue, for voluntary ex- EastAsia and Pacific 8,604 11,531 2,709 4,668 change of Brady par and discount bonds, was SouthsAsia 636 520 0 200 Europe and Central Asia 1.598 541 0 341 well received by both US institutions and local m- Lat n America 10,097 7,746 3,091 4,539 vestors-Mexican banks bought about 25%. Middle East and North Africa 0 50 0 60 Pemex raised $300 million with a two-year note, Sovereign 17,156 24,253 9,885 9,400 the company's first dollar bond in three years, at Sub-Saharan Africa 1,520 496 151 0 East Asia and Pacific 2,399 569 683 8 0 a 190-basis point spread over Treasuries. Corpo- South Asia I50 0 0 150 rate issues increased as well and included Grupo Europe and Central Asia 9,115 10,204 2,798 2,541 rate Issues increased as well and Included GrupoLatin America 3,572 2,105 6,253 5,898 Televisa SA de CV, which raised $700 million in Middle East and North Africa 400 879 0 0 the dollar market with a fixed-rate three tranche Other publc I 1,963 13,101 3,900 4,047 issue and maturities of 7-12 years, with spreads Sub-SaharanAfrca 0 396 0 140 EastAsia and Pacific 6,599 8,16 2,263 1,860 ranging from 465-650 basis points. The deal is SouthAsa 300 262 200 20 bigger than any previous offering of its type. In Europe and Central Asia 1,062 1,501 0 100 Latin America 4,003 2,731 1,437 1,827 July Mexico made news with a $6 billion issue Middle East and North Africa 0 50 0 l 00 (see below). Source: Euromoney Bondware and World Bank. f Financial Flows and the Developing Countries m International lending and capital markets raised $500 million with spreads ranging from turity. In July Slovenia made its debut and raised 90-155 basis points, mostly issues by utility com- $325 million in the dollar market at a 58-basis point panies. Colombia had issues totaling $650 mil- spread. Rating agencies assigned an A rating to the lion, with the government raising $400 million issue, the highest initial credit rating ever assigned sovereign issues at a 150-basis point spread. Fi- an Eastern European transition economy. Other nanciera Energetica Nacional, 94% owned by Eastern European issuers included Estonia, the Republic of Colombia, launched a 10-year Poland, and Romania. bond at a spread of 250 basis points. Issuers from the Middle East and North .. ,.-p3 Y At $3.8 billion the Republic of Korea was the Africa were absent other than two issues that leading issuer among Asian countries, followed emerged from Lebanon-one by the govern- , i by the Philippines ($910 million), Thailand ment ($100 million) and the other by Credit ($837 million), Indonesia ($796 million), and Libanais ($60 million), which is partly owned bv China ($750 million). About 70% of Korea's the central bank. The latter was the first interna- -' issues came from the banking sector. The Ko- tional bond issue by a Lebanese bank. rean Development Bank raised $750 million in Preliminary figures indicate that developing US dollars at a 74-basis point spread, $129 mil- countries raised $12 billion inJuly, with half this lion in Hong Kong dollars, and $285 million in amount coming from the huge issue by the Mex- yen. The Korean Export-Import Bank raised ican government to repay part of the loans it re- $200 million in US dollars at a 47-basis point ceived from the IMF and the US Treasury under spread. The placing of these deals may have re- the 1995 bailout package. The five-year floating flected investors' belief that spreads will tighten rate note set at three-month LIBOR plus 200 if Korea becomes a member of the OECD. The basis points was the largest tranche ever for Philippines raised $910 million, $300 million of sovereign Eurobonds. Moody's and Standard it by the Philippine long distance telephone and Poor's (S&P's) rated the issue investment company, which issued a 7-year note at a 175 grade because the bonds will be supported by oil basis point spread and a 10-year note at a 240- revenues from Pemex. About half of the issue was basis point spread, 100 basis points tighter than bought by banks and half by bond investors. 1995's 10-year issue. China raised $700 million Bondissuancesareexpectedtosetanewrecord through a five-year fixed-rate note at a spread of in 1996, since in the first seven months of the year 80 basis points and a coupon rate of 7.37%. The they reached 95% of 1995's record of $57.8 billion. enthusiastic response was driven by strong eco- The full recovery of developing-country issues from nomic fundamentals and a feeling in the market the Mexican crisis can be attributed to a number of that the country has been undervalued by rating factors, including continued low interest rates rela- agencies. Pakistan re-entered the market after an tive to 1994, higher liquidity in the market follow- 18-month absence by issuing a 5.5-year floating ing 1995's jump in stocks and bonds, and an note for $150 million at a spread of about 200 increase in the volume of bond issues maturing this basis points over three-month LIBOR, well below year. In addition, investors-particularly US insti- the previous issue's spread of 385 basis points. tutional investors-have been more willing to pick Issues by developing countries in Europe up the extra yield offered by developing-country' reached $3 billion, with Turkey accounting for $1.5 paper because their perception of credit risks has billion from the yen ($1 billion) and dollar ($500 improved as a result in several countries' reform million) markets. The $500 million issue enjoyed a programs. lower spread (200 basis points) than a comparable issue in 1995 (300 basis points). Hungary borrowed Longer maturities, lower spreads, and $333 million with a six-year bond issue at a spread more fixed-rate issues of 90 basis points, much lower than the 210-basis More favorable investor reception of develop- point spread paid for a 1995 issue with the same ma- ing-country debt paper led to issues with longer August 1996 5 International lending and capital markets 0 maturities. More than 50% of the issues had ma- diversify currency exposure, broaden the investor turities longer than six years, compared with base, and set new benchmarks for their issues. 36% in 1995 (figure 1). Issues with maturities Issues from governments dominated and ac- longer than 15 years continued to grow and counted for 41% of total volume during the quar- posted a 72% increase over the first quarter. ter, with major issues from Mexico ($2.7 billion), Bond spreads at launch and in secondary mar- Argentina ($2.6 billion), and Turkey ($1.5 bil- ket trading narrowed for developing-country lion). Issues from the financial sector accounted debt but are still above the levels prior to the for 27% of the total, with issues from Korea ($2.8 peso crisis. Spreads for Latin American isstiers, billion) and Brazil ($1.3 billion) dominating particularly from Argentina, Brazil, and Mexico, have been declining but remain much higher - Bond issues from developing than those for Asian and European issuers. countries, by maturity 3US$ billions Investors were willing to lock in returns at cur- ' rent interest rates, with the share of fixed-rate issues 57.8 Over 15 years U increasing to 84% in the second quarter, compared I-l15 years E1 with 74% in the fourth quarter of 1995 (figure 2). 6- 10 years U | /~~~~~~-5 yearsa The volume of credit-enhanced bonds fell, particu- Currency larly convertible bonds, which accounted for 4% of composition of bondiI issues, 1 996Q2 total volume compared with 12% in the first quar- ter. Securitized issues are favored by Latin issuers, East and South Asia while convertible bonds are mainly issued by Asian 23.2 ($7.7 b ion) (Korean and Thai) borrowers. The slowdown in the 19.8 Yen SFR issuance of convertible bonds can be attributed to I I i7% /% Other the large stock of existing issues and to weak per- 2% formance and volatility in Asian stock markets dur- ing the latter part of the second quarter. < 80%< - 0 995 11996Q I l 996Q2 Dollar market gains ground Source: Euromoney Bondwam and World Bank. Latin Arnerica Dollar-denominated issues continucd to gain mar- ($ 2.3 billion) ket share, accounting for almost two-thirds of total Bond issues from developing 5U7% 2Y% volume in the second quarter, compared with 0u$besyons about half in the previous quarter (figure 3). Developing-country issuers, particularly from Latin 57.8 Floating U DM ~ ~ av ldte S ~ i-Convertible L-II - lt18% America, have reestablished the US institutional in- Fixed rate a L ira vestor base that was weakened by the peso crisis. 3t 2o The yen's share of the market increased to 23% from 19% the previous quarter, with strong de- Europe and Central Asia mand from retail investors. Borrowers have en- ($3.0 Silion Yen joyed narrow spreads in the yen market, which 49% some observers attribute, in part, to less-strict rat- 2 a | | 0 !Ei ings of yen-denominated issues byjapanese credit 19.8 2 rating agencies relative to US rating agencies. The - DM deutsche mark's share of the market fell to 11% US$ from 20% in the first quarter, partly because of an 38% increase in German long-term interest rates. De- veloping countries have continued to issue in new 1995 1996Ql 1996Q2 Source: Euromoney Bondware and World Bank. currencies (such as lira and guilders) in an effort to Source: Euromoney Bondware awd Word Bank. n Financial Flows and the Developing Countries aF _ International lending and capital markets (figure 4). Issues from utilities accounted for Virtually all Latin American bonds were higher. 13%, with major issues from Brazil and the Mexico's swap of $1.75.billion of Bradybonds for Philippines, while issues from the manufacturing new United Mexican States bonds boded well for sector accounted for 10% and were issued mostly the market, showing that Mexico could raise by South and East Asian companies. long-term money instead of relying on short- term borrowing. Argentina is starting to show Thailand allows the IFC to issue signs of economic growth. Venezuelan issues baht bonds continued to benefit from the recent surge in oil In an effort to boost the supply of high-quality prices and improvements in economic policy bonds in the Thai market, the government has al- (see the market creditworthiness section). The lowed the International Finance Corporation prices of Brazil's Brady bonds rose on reports (IFC) to issue two-year, baht-denominated bonds that the government was examining a scheme for $200 million. The issue is part of an effort by similar to Mexico's of swapping Brady bonds for the IFC to widen its funding base, as well as de- conventional long-term dollar-denominated velop bond markets in developing countries by debt. Meanwhile, reports that Peru may convert establishing a benchmark interest rate and a $32 billion of external debt into Brady bonds by bond yield curve. Thai authorities did not grant December 1996 has opened new credit lines to the issue the status of a state enterprise bond, Peruvian businesses. which would have allowed financial institutions Prices have risen over the past year because of to hold the bonds as part of their reserve re- improved economic prospects in a number of quirement and permitted trading in the bond countries (particularly the recovery of Latin through the central bank's repurchase window. American countries from the peso crisis) and a The IFC also has applied to issue in the Korean demand from a wider range of institutional in- won, Indonesian rupiah, and Malaysian ringgit vestors for higher-yielding issues. Brady bonds, at markets. And it recently made issues in the Czech $140 billion (as of end-June), are now the biggest koruna, Polish zloty, and Greek drachma mar- and most liquid emerging bond market. These kets in an effort to develop those as well. bonds, first issued by Mexico in 1990, have shown an overall return of 150% sinceJP Morgan first Secondary market prices up in second quarter Secondary market price index, January 1993-June 1996 Prices of secondary market instruments gained April 1990=100 strongly in the second quarter of 1996 (figure 5). F :LW- Sectoral breakdown of developing-country bond issues, 200 1996Q2 Other Manufacturng 4% 160 i e - ---- I0% _ BonkinglI Energy/telecom/ _ finonce 27% 140 utilities 13% Mining/oix 5 % / 1 20o.. Government 41% 100 ._ _ _ i Note Other" ncudes utlities. agricuture construci,on, transport, and other serv ces.------ ------ ---- Souce Euromoney Bondware and Word Bank. Source. Word Bank. August 1996 International lending and capital markets calculated its emerging market Brady Bond pared with $73 billion in 1994 (table 2). At $42 Index. Prices are up since January despite a fall billion, activity was most buoyant during the in the US bond market, which Bradys have typi- fourth quarter of 1995. cally tended to follow. In July Panama became Preliminary data on syndicated loans to de- the ninth country in Latin America and the four- veloping countries indicate a drop to $21.9 bil- teenth country in the world to issue Bradys. In lion in the second quarter from $24.2 billion in addition, the Russian securitized debt-created the previous quarter (figure 6). Still the $46 bil- by the country's $33 billion commercial debt re- lion in loan commitments during the first half of structuring earlier in 1996-began trading. The the year exceeds the $43 billion during the first securities are not technically Bradys but are half of 1995. Loans to the private sector in- viewed by investors and traders as a similar asset. creased 11.5% (to $16 billion) over the first quar- ter, accounting for 73% of the total. Public sector Commercial bank loans loans fell 40% to $5.3 billion and accounted for 24% of the total. Loans fell to every region other Loan coninitments fell in second than Sub-Saharan Africa and Latin America. quarter About 90% of the loan commitments were de- The volume of syndicated loans to developing nominated in US dollars; loans denominated in countries has increased dramatically over the yen and deutsche marks accounted for 1.5% past couple of years. Efforts by developing coun- each (figure 7). A number of syndicated loans tries to increase profitability and better manage were denominated in local currency, mainly In- risks have made major international banks more donesian rupiah and Malaysian ringgit. willing to take on developing-country exposure, At $13.7 billion, loans to Asia accounted for while the countries are attracted to the lower 62% of the total, with the private sector taking the costs relative to borrowing in the bond market. largest share ($10 billion). Loan commitments to Loan commitments to developing countries Indonesia reached $4.4 billion, mostly at increased to a record $112 billion in 1995, com- medium- to long-term maturities, for acquisitions, Loan issues by type of borrower US$ millions 1995 1995 1995 1995 1996 1996 Ci-iP, 6 Syndicated loans to developing 1994 1995 QI Q2 Q3 Q4 Qi Q2 countries, by maturity All developing countries 72,780 112,358 20,587 22,275 27,700 41,797 24,249 21,944 US$ millions Prnvote 32,110 58,965 11,015 9,636 16,133 22,181 14,350 16,006 Sub-SaharanAfrica 1,022 2,606 351 883 1,105 267 815 2,144 Over 10 years U EastAsiaand Pacific 20,685 36,337 7,388 5,518 11,297 12,134 1,139 10,056 112,358 6IO years South Asia 1,857 2,400 1,305 468 327 300 643 171 Europe and Central Asia 1,645 5,344 288 704 910 3,442 816 1,125 2-5 years C Latin America 6,434 11,621 1,463 1,785 2,385 5,987 938 2,255 0-1 years a Middle East and North Africa 468 657 220 278 109 50 0 255 Sovereign 10,604 7,284 689 2,512 2,483 1,600 1,123 678 Sub-SaharanAfrica 28 411 14 23 317 56 40 0 East Asia and Pacific 4,074 1,727 509 751 378 88 98 542 South Asia 283 361 0 161 0 200 375 0 Europe and Central Asia 2,585 1,666 116 500 737 314 60 136 Latin America 585 2,914 50 1,077 1,050 737 350 0 Middle East and North Africa 3,048 205 0 0 0 205 200 0 Other public 30,066 46,109 8,882 10,127 9,084 18,016 8,775 5,260 24,249 Sub-Saharan Africa 311 2,649 160 232 1,317 940 440 185 21,944 EastAsaandPacific 14,568 19,634 2,679 3,190 3,319 10,446 3,024 1,819 South Asia 2,411 3,339 1,220 932 553 634 968 1,082 Europe and Central Asia 6,692 6,759 1,047 1,225 2,272 2,215 2,845 994 Latin America 4,838 5,660 539 751 1568 2,802 937 1,079 Middle East and North Africa 1,246 8,067 3,237 3,796 55 979 561 100 1995 1996Ql 996Q2 Source: Euromoney Loanware and World Bank. Source: Euromoney tondware and World tank. a FinancialFlows and theDeveloping Countries E International lending and capital markets refinancing, and project finance. Most of the over LIBOR, and the Vietnam Posts & Telecom- loans went to the private sector, although the gov- munications Corporation raised $25 million at a ernment raised $512 million-$500 million in US 200-basis point spread over LIBOR, the first syn- dollars and $12 million in Dutch guilders. Korean dicated debt facility to be completed for a state- entities were major players as well and got $3 bil- owned entity in Vietnam. lion in loan commitments with maturities of three Loans to Latin America rose to $3.3 billion in years or more. Spreads on loans to Korea stayed the second quarter, compared with $2.2 billion around 50 basis points over LIBOR. Loan com- in the first quarter, although borrowing remains mitments to China reached $1.7 billion at lower far below the record pace of 1995 ($20.2 billion spreads than in recent years as the government for the year). Loan commitments to Mexico eased credit controls with the decline in inflation. reached $1.4 billion and were directed toward China International Trust & Investment Corpo- project finance and refinancing, about 65% of it ration raised $100 million in loans with one-year short term. Nacianal Financiera SNC, a public maturities. This commercial paper facility will be bank, borrowed $315 million as a standby facil- denominated in multiple currencies, including ity, and Avance de Telecommunicaciones Lati- US dollar, ECU, and Swiss franc. namericano raised $300 million for project Thai companies borrowed $1.9 billion, mostly finance. Empresas La Moderna also raised $300 in medium-term maturities, with the financial sec- million in the medium-term market. Brazilian tor accounting for one-third. Loans to India entities raised $1.2 billion, mostly short term, reached $1 billion, mainly directed to the finan- with Petrobras accounting for 43%. The banking cial and oil-petrochemicals sectors. Loans to sector was active as well, with loans to Banco Malaysia were $950 million, with Petronas raising Brasileiro de Descontos ($200 million), Banco $149 million and Amsteel Mills $230 million. The Bradesco ($200 million), and Unibanco-Uniao Philippines received $507 million in commit- de Banks Brasileiros ($150 million). Chilean en- ments. Philippine Airlines raised $314 million tities raised $384 million, all in the medium-term and the Philippine Long Distance Telephone market. Banco del Estado raised $49 million at a Company $71 million. Pakistani entities raised 35-basis point spread. Two loan commitments $220 million-Saudi Pak $25 million in deutsche were made to Argentine firms during the quar- marks, and Cotton Export Corporation $90 mil- ter-$180 million to Edesur at a two-year matu- lion in US dollars at a spread of 125 basis points rity and $50 million to Transportadora de gas del over LIBOR. Two Vietnamese companies ac- Sur at an 18-month maturity. Other loans to cessed the market for $60 million: FPSL Watco, a Latin America included Banco Latinoamericano hotel and leisure group, raised $35 million with a de Exportaciones of Panama for $125 million, five-year secured note at a 130-basis point spread Cerveceria Backus yJohnston of Peru for $50 mil- lion, and Caribbean Ispat of Trinidad and To- Currency composition of loan bago for $82.4 million. issues, 1996Q2 Loan commitments to Europe and Central Yen Other Asia fell to $2.5 billion from $3.7 billion in the 2% 7% DM previous quarter, because the expansion in pri- 1% vate sector loans did not keep pace with the de- cline in public sector loans. Loans to Turkish entities reached $744 million, with about 80% directed to the banking sector for trade financ- U5! ing. Loans to Czech Republic entities reached 90%Y0 $614 million, mostly medium-term, dollar-de- nominated borrowing by banks. Hungarian en- Source: Euromoney Bondware and World Bank. tities raised $374 million, with Pannon GSM August 1996 * International lending and capital markets Telecommunications borrowing $175 million in most regions and an increase in the use of short- the medium-term market. Poland's Polfloat term credit facilities (table 4). The average loan Saint Gobain raised $43 million with 8 years to dropped from $79 million in the first quarter to maturity, and Netia Telekom raised $180 mil- $63 million in the second, both well below 1995's lion with 10 years to maturity. The National average of $110 million. The second quarter also Bank of Romania borrowed $90 million. Russia's saw a slight fall in the margins paid by develop- private Inkom Bank raised $20 million in the ing countries (from 133 basis points in the first short-term market-perhaps the first unsecured quarter to 122 basis points in the second), al- syndicated loan to a Russian bank. Slovenia's though this average masks considerable disparity Novo Ljubljanska Bank raised $51 million with in the borrowing costs faced by different coun- six years to maturity, and the government of tries. For example, within Asia, which accounts Lithuania raised $33 million. Croatia's Dal- for the majority of the syndicated loans, margins matinska bank raised $10 million, and Estonia's ranged from 54 basis points for Korea to 250 Hansabank raised $25 million at a margin of 200 basis points for the Philippines. More than three- basis points for three years. quarters of the amount raised through loans was Loan commitments to Sub-Saharan Africa in- denominated in US dollars, with more than half creased to $2.3 billion from $1.3 billion in the of the residual in Indonesian and Malaysian local first quarter, almost entirely directed to South currencies. The volume of deals carrying ex- Africa's private sector. Anglo-American Corpo- tended security based on assets or revenues in- ration of South Africa got a $1 billion five-year creased over the first quarter. Almost half the revolving credit denominated in dollars. Loans deals for East Asia and more than half for Latin to the Middle East and North Africa fell to $355 million from $761 million in the first quarter; in + : Project finance by region and sector 1995 loans totaled $8.9 billion. Saudi Arabian US$ milions 1/995 1l996Q1I 1 996Q2 concerns borrowed $255 million; the rest went to 1 - Region Tunisia's Trans-Tunisian Pipeline Company. All developing countries 27,403 5,030 3,455 Sub-Saharan Africa 1,068 80 5 EastAsiaandPacific 15,105 3,717 2,517 Project finance activity fell South Asia 1,616 818 106 The volume of project finance activity in the first Europe and Central Asia 4,781 157 302 Latin America and Caribbean 2,750 149 525 quarter of 1996 was revised upward to $5 billion North Africa and Middle East 2,083 110 0 (compared with the $2.7 billion reported in the Sector May 1996 Financial Flows), because new infor- Power 8,923 1,922 105 Telecommunications 1117 226 632 mation came in on some 10 additional deals Transportation 2,189 157 0 (table 3). Project finance fell to $3.5 billion in Other infrastructure 1,250 90 578 Noninfrascructure 13,923 2,636 2,140 the second quarter, largely because of a drop in Noninware a 3orld Bank. activity in Asia. Hungary, Poland, and Turkey in Europe and Brazil and Mexico in Latin America AN I l Project finance edged the volume for those regions up from the 1996Q1 1996Q2 previous quarter. Deals syndicated to finance Average size of syndicated deals specific projects in emerging markets accounted (US$ millions) 79 63 for 15% (20% in the first quarter) of the funds Average maturity of deals raised by developing countries in the interna- (years) 6.3 6.1 tional loan markets. Average margin over base rate' (bosi points) I 33 122 Project finance maturities are shortening. Secured deals' The average loan maturity fell from almost 12 (percentoge of project finonce) 30 47 years in 1995 to about 6 years in the first half of a. Based on transactoss for which the cost of borrowing is available. b. Deals with ex(tended secured interest of the investors. 1996 because of a shortening of maturities in Source: Euromoney Loanware and World Bank. * Financial Flows and the Develaping Countries m International lending and capital markets America were secured. Two deals for India were deal includes an interest rate swap under which the only ones for South Asia carrying completion investors receive a floating rate and borrowers guarantees from the sponsors and mortgages pay a fixed rate. The plant is expected to cost over plants and equipment. $73 million, with 30% provided by equity. Consistent with the trend in 1995, about 55% Other project deals included $106 million fi- of the funds committed for project finance dur- nancing for a private corporation (PT Kia ing the first half of 1996 went toward infrastruc- Keramik Mas) in Indonesia for plant expansion. Sovereign foreign ture. The power sector's share declined in the The IFC is providing $6.3 million as equity invest- currency debt second quarter, with deals only from China's ment and arranged an additional $25 million in Long-term ratings, as ofjune 3, 1996 Wuhu Shaoda Electric Power Development Co. debt finance. The IFC also arranged debt financ- Moody's S&P Ltd., and China Resources (Xuzhou) Electric ing of $48 million and took up equity and quasi- investment grade Power Co. Ltd. Both deals met with a strong in- equity stakes worth $10 million in a hotel Chile Baa' A-/A3 R China Al BBB 2 vestor response and were oversubscribed. construction and renovation project undertaken Colombia Baa3 BBB-/ China's Ministry of Finance came to the market by Grupo Posadas SA de CV of Mexico. Smaller A+2 Cyprus Al AA- for $30 million to provide funding for two addi- deals, such as China's Zhoushan Zhongwei Oil Czech Republic Baal A' tional power projects to be established at a cost Store Co. Ltd. ($15 million), Indonesia's PT Sinar Greece Baa3 BBB-' India Baa3 BB-+ of $1.4 billion. The World Bank is cofinancing Angkasa Rungkut ($29 million), and Poland's Indonesia Baal BBB/ $440 million, and the remaining capital will be Polfloat Saint Gobain ($43 million), were over- A+* Korea,Rep.of A MA-' raised in local currency. This is the first time the subscribed, reflecting strong investor interest in fi- Malaysia A A+/ Ministry has procured cofinancing from the nancing projects in emerging markets. AAr+2 World Bank without the Bank guaranteeing the Maita A2 Ar+ AAr*i commercial portion of the financing. Market creditworthiness Poland Baa3 BBB-/ In the telecommunications sector a $62 mil- Slovakia Baa3 BBB-/ lion loan to a private company in Hungary at- Sloveniajumps into Eurobond A` tracted $3 million in equity and a $20 million market Slovenia A3 NM' Soutn Africa Baa3 BB+/ loan from the European Bank for Reconstruc- Slovenia launched its maiden Eurobond issue in BBB+*2 tion and Development (EBRD). The biggest deal June with A ratings from the major rating agen- Thaland A2 A/AM Tunisia Baa3 n.a. ($300 million) in the sector went to Mexico's cies. Moody's gave the country a sovereign ceil- Belowinvestmentgrade Avance de Telecommunicaciones Latinoameri- ing of A3, and Standard and Poor's assigned an Argentina B BB-/ cano to build a fiber optic network. The Philip- A rating with a stable outlook (table 5). The rat- BBB-* Barbados Ba2 n.a, pine's long-distance telephone and telegraph ings are the country's first and should ease its Brazil Bi B+2 companies tapped the market to provide capital entry into capital markets. The relatively high Hungary Ba' BB+ Jordan Ba5 Br! for expanding and improving networks. Netia ratings reflect three consecutive years of export- BBB-2 Telekom of Poland borrowed $180 million in 10- led growth, low debt ratios, and a sharp increase Mexico Ba2/ BB/ Baa3* BBB+*3 year funds to construct a fixed-line telephone in foreign exchange reserves (which reached Pakistan B' B+i network. more than two months of import coverage); a Paraguay na. BB-I Indonesia's PT Citra Bhakti Margatama Per- flexible corporate industrial structure and expe- Philippines Ba2 BBI sada syndication borrowed $399 million (at 12 rienced managerial level talent; competitive ad- BBB+r2 years maturity and 5 years' grace) to construct vantages in certain European markets; and the Romania Ba3 BB- yasmauiyayears eas rc)t osrc atgsi eti uoenmres n h Trinidad a portion of the Jakarta toll road project. Four country's apparent political consensus to pursue and Tobago Bal BB+2 private companies from Korea raised the re- market reforms, fiscal prudence, and tight mon- Turkey Ba3 B+ private companies ~~~~~~~~ ~~~~~~~~~~~~~~~~~~~~~~~~~~Uruguay Bal BB+/ maining amount of project finance in the con- etary policies. These policies helped the central BBBs struction sector during the second quarter. In bank reduce inflation from 250% in 1991 to Venezuela Ba2 Bi * The first rating applies to foreign the water and sewage sector the sponsors of the 8.6% in 1995. Furthermore, Moody's reports that currency cebt and the second to Shanghai Da Chang Water Treatment Plant, the significant corporate restructuring that oc- comestic currency debt. n.a. Not app icable. which is being undertaken on a build-operate- curred before the mass privatization program I. Stable outlook. 2. Passtive oudlook. transfer (BOT) basis, raised $53 million. The was initiated in 1993 improved productivity, thus 3. Negatve outlook, August 1996 M International lending and capital markets 0 facilitating export growth despite currency ap- tighter monetary policies coupled with more vig- preciation and relatively high wages. Moody's orous measures to restructure and privatize pub- views the containment of labor costs as the gov- lic enterprises, with the goal of reducing the ernment's main challenge, given the high level quasi-fiscal deficit and attracting larger inflows of of nonwage costs (that is, social security) and the foreign investment. centralized system of wage negotiations. In May Standard and Poor's assigned Indone- sia a long-term local currency debt rating of A+. Ratings assigned for Romania and The rating was supported by Indonesia's strong Indonesia public finances, robust growth of non-oil exports Meanwhile, Romania was assigned a rating by (expected to continue at 16% annually), savings Moody's (Ba3), Standard and Poor's (BB-), and and investment levels above 30% of GDP, and the Duff & Phelps (BBB-). The ratings reflect the central government's insignificant rupiah debt country's modest net external debt burden, which burden (estimated at 3% of GDP). at 35% of exports compares well with other BB- rated sovereigns. In 1995 industrial output in- Venezuela's outlook improves creased almost 10% (the second consecutive year Standard and Poor's affirmed the B rating for of improvement), supporting real GDP growth of Venezuela's long- and short-term foreign cur- 6.9%. Inflation has fallen below 30% from over rencydebtand revised the country's outlookfrom 200% in 1994. negative to stable. The economic policy environ- Moody's believes that Romania's skilled, inex- ment has improved with the implementation of pensive labor force, large domestic market, rea- the first phase of an ambitious macroeconomic sonable savings and investment rates, and ample program, including steps to free interest and ex- reserves of many important raw materials will at- change rates, remove capital controls, and raise tract further increases in foreign investment. Over gasoline prices closer to world levels. In addition, the past few years, however, slow progress on en- progress toward a $1.4 billion standby agreement terprise reform and an overvalued currency have with the IMF has underpinned investor confi- led to an increase in imports and a widening of the dence and could pave the way for loan disburse- current account deficit. Analysts recommend ments from other multilateral donors. Emerging stock markets ports for technology stocks sent shock waves through the US markets. The US long-term bond Emerging markets strong in second rate rose above 7%, compared with 6% in early quarter, plummet in July January, and for the month the S&P 500 fell 4.5% The IFC's investable composite index (IFCI) in- and the Dow, 2.2%. Net flows to stock mutual creased 3.3% in the second quarter and was up funds slowed to $5 billion inJuly, compared with 11% from the end of 1995 (figure 8). The IFCI more than $20 billion a month since the begin- Latin America index rose 8.5% in the quarter, and ning of the year. Emerging stock markets felt the the Asia index was up 3.9%. The only regional impact immediately. Except for Peru and the index to show a decline for the quarter was Eu- Czech Republic, every emerging market in the rope, the Middle East, and Africa, which fell 4% IFCI index fell during the month. The IFCI com- because of a drop in the South African market but posite fell 6.7%-the largest monthly decline was up 2% for the six months ending inJune. since January 1995's "tequila effect" (led by the In July, however, the release of a strong US IFCI index for Asia, which fell 8.4%. The largest employment report coupled with weak profit re- declines were posted by Pakistan (16.5%), Thai- M Financial Flows and the Developing Countries * Equity portfolio and foreign direct investment land (16.2%), Hungary (14.4%), Argentina prices by requiring that all parties involved in a (13.6%), and Indonesia (12.5%). takeover attempt keep information confidential Most Asian emerging markets have been ad- until the deal is complete. versely affected by domestic and international Political unrest and lack of foreign investor par- developments since May of this year. After a ticipation led the Colombo Stock Exchange to post sharp rise in April the Korean bourse suffered a a 10% decline for the first seven months of the year. double-digit decline in May and June, finishing Political uncertainty and the possibility of eco- down 17.6% for the seven months ending injuly nomic overheating coupledwith higher rates in the (figure 9). Although the economy continues to US contributed to a 15% decline in the Jakarta grow at a healthy rate, investors are concerned by falling exports, an increase in the current ac- > ~~~~~~~~i!fi 1 ' IFC's Investable Composite Index, by region count deficit, an appreciation of the won against July 1994-July 1996 the yen, interest rate hikes by the central bank,-- ------ and political uncertainty related to the arrest of 140 - high-level government officials on bribery July 1994=100 charges. The government recently proposed fi- I 00 nancial reforms that would reduce its influence 120 -_ Euope, the Middle East,\ over the Korea Stock Exchange. The package, ---- on NorthAfoca which could take affect by autumn, would abol- I ish government control over the volume of ini- 1oo 00 ----------- Asia tial public offerings and new rights issues entering the market, widen from 6% to 10% the A\ e mres band in which individual stock prices are allowed 80 to trade on a daily basis, and eliminate the ceil- \ ---en c a Latin America ing on brokerage commissions. The government is also considering measures to raise listing re- 60 quirements to maintain quality. About 200 com- panies are waiting for approval to list on the - X Source Internatona FnanceCorporaton. exchange; just 36 companies were approved in 1995. The government will also limit how much - IFC's Investable Composite Index for the Republic of Korea equity the country's 10 largest conglomerates and Mexico, July 1994-July 1996 can list in order to control their dominance of the market. 120 - - - - - -- - The Thai market also has not fared well, post- July 1994=100 ing a 22% drop for the seven months ending in --------_-------*-- July. Shares fell to their lowest level in three years, particularly finance and property issues, 90 - -- because of government instability, higher inter- Korea est rates, poor corporate earnings reports, and volatility in the US markets. In an effort to boost liquidity, the exchange has introduced the SET 60 --- MexicoN 50 Index, made up of 50 large and liquid com- panies that are suited for index futures and op- - --------------------------------------- tions. Investors will also be allowed to purchase less than the current 100-share minimum in 30 blue-chip stocks. In addition, the exchange has introduced rules to curtail manipulation of share source: International Finance Corporation August 1996 X Equity portfolio and foreign direct investment 0 Stock Exchange in June-July, bringing the ex- hopes of privatization of major state-owned enti- change to 3% below its end-1995 level. Trading vol- ties emerged, along with lower interest rates and ume was heavy during the second quarter, and the inflation. Mexico's stock market has increased price-earnings (P/E) ratio, at 22, was lower than in 10% this year (see figure 9). The exchange has the recent past. In Pakistan concerns over the econ- launched offshore derivatives in its IPC equity omy caused the Karachi Stock Exchange to fall index in Chicago to provide international money 16.5% inJuly, although for the seven months end- managers with a facility to hedge or perform ar- ing in July the index was down just 1.5%. The de- bitrage trades using the Mexican shares market cline is attributed to domestic unrest, an absence of and Chicago's corresponding dollar-based fu- foreign investors, and concerns about privatizing tures and options contracts. The exchange ex- telecommunications. pects to open its domestic derivatives market this After strong growth in the first half of the fall. Peru's market has posted an 11% increase year, the Bombay Stock Exchange fell 10% in since January and was one of the two emerging July. This drop had a number of causes. The gov- markets that did not decline inJuly. ernment announced a new "minimum alterna- The government brought to the market Tele- tive tax," designed to catch in the corporate tax fonica del Peru, which was very well received by do- net top companies that currently avoid such mestic and foreign investors. The Venezuelan taxes through exemptions for investments, de- market rose 40% between January andJuly, heart- preciation, or export earnings. Companies were enedbythe signing ofaletterofintentwith the IMF allowed to issue up to 25% of paid-up capital as for a $1.4 billion standby loan and the increasing nonvoting shares, sparking investor fears about likelihood of a Paris Club arrangement and Brady the possible dilution of their holdings. In addi- bond exchanges. Chile's stock market has fallen tion, some observers were skeptical that the gov- 3% this year in response to the central bank's rais- ernment would meet targets for the budget ing of 90-day cetes (from 6.7% to 7-7.5%) to con- deficit and privatization. tain inflationary pressures. The Argentine stock On the positive side, foreigners are now per- market, already slightly down from the beginning mitted to buy 10% of an Indian company's equity of the year, dropped 14% inJuly on concerns about (compared with 5% before) and to invest in un- the country's ability to meet IMF targets and the fall listed companies. The Manila stock market posted in US markets. The government recently an- a 14% increase for the first seven months of 1996 nounced new measures to reduce the budget (despite some decline inJuly) due to rapid growth deficit and maintain financial stability. in corporate earnings and GDP. Property stocks The IFCI index for Europe, the Middle East, did particularly well because property values and and Africa fell 4.7% for the seven months ending rents in the commercial areas are booming. With in July, largely because the heavily weighted a P/E ratio of 32, the Manila exchange is the most South African stock market dropped 16%. South expensive market in Asia. Improvements to the African shares fell in response to bad economic market's infrastructure include the creation of reports, a fast-depreciating rand, and turmoil in the Securities Clearing Corporation to serve as a international markets. The government's slow central clearing agency and manage a trade guar- pace in implementing market-oriented eco- antee fund for the exchange. The Philippine Cen- nomic policies also has unsettled the market. tral Depository, Inc. will serve as central Zimbabwe equities have been performing quite depository to facilitate immobilization and mate- well and have increased 34% since December rialization of stock certificates. 1995, aided by good corporate profit reports. Latin American stock markets have fared bet- Central and Eastern Europe's stock ex- ter than Asian markets but also were affected by changes have performed extremely well this the July upheaval in US stock markets. Brazil's year. The Warsaw Stock Exchange increased 64% stock market increased 18% through July as for the seven months ending inJuly, the result of E Financial Flows and the Developing Countries Equity portfolio and foreign direct investment strong economic fundamentals and a favorable depository receipts (GDRs). Bangkok Entertain- outcome of the Russian elections. The exchange ment raised $411 million through a two tranche plans to introduce continuous trading for se- deal and was the only Thai company in the mar- lected stocks in the third quarter of 1996. Al- ket. Two Indonesian firms raised $183 million, though the Hungarian stock market fell 14% in one of them through ADRs issued on Nasdaq. July, it posted a 52% return for the first seven There was only one issue from India, a GDR by months as a whole, with pharmaceutical, oil, and Bharat Hotels that raised $19.5 million. GDR gas companies continuing to do well. Investor issues from India are expected to increase as a re- confidence was boosted by improvements in the sult of reforms that removed the limit on the economy, record privatization receipts at the number of companies allowed to issue GDRs end of 1995, and an agreement with the IMF. De- each year and enabled issuers to repatriate 25 spite political uncertainty and currency depreci- percent of the funds raised for corporate re- ation, the Turkish stock market increased 39% structuring. for the seven months ending inJuly, with most of Although issues from Latin America fell to the gains achieved in the first quarter. $454 million from $588 million the previous quarter, Latin issuers have been re-establishing New equities investor confidence, particularly in the US, and more issues are in the pipeline. Issues from New equity issues fell during the second quarter. Chile dominated, with Banco BHIF raising $125 Unlike the buoyant bond market, new equity is- million mainly from two ADR tranches, with sues from developing countries continued to 75% of the deal bought by North American in- trend downward since the strong showing in the vestors. Santa Isabel, a retailer, raised $86 mil- fourth quarter of 1995. This decline can be partly lion on the NYSE. Two Argentine companies attributed to the lack of privatization issues and were present in the market. Disco SA, a con- large number of initial public offerings from in- sumer goods retailer, raised $100 million. dustrial countries, which may have diverted in- Siderar, a steel company, raised $78 million with vestors from emerging market issuers. one tranche on the NYSE and another in Buenos Equity issues fell to $2.4 billion in the second Aires. The Peruvian concern Compania de quarter from $2.8 billion in the first quarter (fig- ure 10). Still, the $5.3 billion for the first half of International equity issues by region this year is higher than the $4.2 billion raised -S U5$rnihons during the first half of last year in the wake of the Other a Mexican crisis. Issues from Asia continued to 12,155 Latin America D dominate, while issues from Latin America fell, Asia E and companies from the Middle East and Africa were absent from the market. Privatization activ- ity was muted, accounting for only 22% of new is- sues compared with 36% in the first quarter. Issues from Asia increased 30% to $1.8 bil- lion. China accounted for $580 million, mainly with American depository receipts (ADRs) listed on the New York Stock Exchange (NYSE) and H 2,786 2,435 shares listed in Hong Kong. Using ADRs, Korea Mobile Telecommunications raised $338 million on the NYSE, one of the largest-ever interna- 1995 1996Q1 l/996Q2 tional equity offers for a Korean company. .- - -_- Hyundai Motor raised $100 million using global Note. Eq fgures inc udewdomes c trankes August 1996 E Equity portfolio and foreign direct investment Minas Buenaventura, a silver mining company, neering company, issued GDRs that were nine raised $107 million. times oversubscribed. This was the first issue to The share of depository receipt (ADR and emerge since the new United Front government GDR) issues increased during the second quar- took office. At $7.56 a share, the issue's price was ter and accounted for more than half the volume at a premium of 6.11 % on the three-day average of new issues, compared with about 40% in the closing share price on the Bombay exchange. previous quarter. Depository receipts are be- From Hungary a domestic and a global issue coming increasingly attractive, with turnover on came to market for the privatization of Tiszai the NYSE, Nasdaq, and AMEX reaching 10 bil- Vergyi Kombinat for $142 million. lion shares in 1995. Although direct access to local emerging markets has been made easier, Investments up in emerging depository receipts continue to offer a greater market funds pool of investors. Depository receipts are partic- A record amount of money flowed into US stock ularly suitable for large deals that cannot easily market funds during the first five months of the be absorbed by local markets. In addition, small year, spilling over to emerging market funds. Ac- investors may pay lower transaction costs for de- cording to a survey by Micropal, Inc. of 246 pository receipts than they would if they pur- emerging market funds, these funds bought $4.3 chased stock in the local market. ADRs have been billion worth of emerging market stock in the the most commonly used depository receipt be- first quarter of 1996, more than they invested in cause US investors were the main buyers. Re- all of 1995. Asia remained a popular destination cently, however, increased interest from ($2.5 billion), with Thailand attracting the European and Asian investors has boosted is- largest amount. Latin equities received $1.3 bil- suance of GDRs. lion, with Mexico accounting for half. Some $500 Activity picked up during the month of July million went to Europe, the Middle East, and when new equity issues-mainly from privatiza- Africa. tion-reached $1.5 billion. Telefonica del Peru A number of Asian funds were launched dur- came to market with a four tranche deal and ing the second quarter. The Asean Fund, an raised $990 million, one of the continent's open-end fund, aims to raise $35-40 million. The biggest equity offers ever. Only Argentina's giant closed-end Fidelity Asian Values Fund and oil company YPF and Mexico's Telmex have Developing countries' raised more. Strong demand from foreign in- best-performing closed-end vestors initially led the government to cut back equity funds the domestic tranche, but in response to com- Percent Number Average return plaints that the domestic offering was increased Market offunds July 1996 Russ a I10 24.30 for the citizen participation program. The offer Turkey 3 8.48 price for each ADR share was $20.50, but strong Emerging Europe 6 4.73 demand caused the price to appreciate by 10% Brazi 5 2411 immediately after issue. There were two Mexican Lat n America 6 1.59 issuers in the second quarter-DESC Sociedad Chile 4 1.47 Vietnam S 1.39 de Fomento Industrial ($74 million) and Grupo China 3 1.36 Casa Autrey SA ($49 million). The first global Africa 9 0.76 issue by an Egyptian company (Commercial In- Czech Republic 3 0.66 ternational Bank) raised $19 million. Commer- Argentina 3 0.43 Emerging markets 23 0.37 cial International Investment Company, an Mexico 3 -2.75 associate company of the bank, will be listed on Thailand 10 -3.75 Indonesia 9 -4.98 the London Stock Exchange. Crompton Republcof Korea 14 -9.67 Greaves, India's largest private electrical engi- Source: Lipper Internationa Closed-End Funds Service. * Financial Flows and the Developing Countries Equity portfolio and foreign direct investment Greater Mekong Capital Fund were launched to lion from $8 billion in 1994, perhaps as a result invest in Cambodia, Lao PDR, Myanmar, Thai- of uncertainty following the peso crisis; and in- land, and Vietnam. Finansa Thai, a local fund flows to Central and Eastern Europe doubled to management company, launched the Southeast $12 billion, with the Czech Republic, Hungary, Asia Frontier Fund to invest $25 million in Viet- Poland, Slovakia, and Slovenia continuing to nam, as well as in Cambodia, Lao PDR, and take the largest shares. Myanmar. The Indian Equity Growth Fund will Preliminary estimates indicate that strong raise $20 million to be invested in Indian equity growth in FDI continued in 1996. The German and equity-related transferable securities. chemicals group BASF recently announced plans Elsewhere, the closed-end Egypt Investment to build a $4 billion petrochemical complex in Company will be listed on the London Stock Ex- China in a joint venture with Sinopec, the state- change to invest in Egyptian equities. Two funds run producer. Called Yangzi BASF Styrenics, it were launched to invest in Eastern European eq- will be the largest foreign investment in the sec- uities Firebird New Russia Fund and Jardine tor since China launched economic reforms, Fleming Eastern European Trusts. The Schroder with BASF holding a 60% stake. Emerging Markets Fund will invest 54% of its as- Hungary has become a growing market for in- sets in Latin securities, and Regent Kingpin Chile vestment in automobile production: VAW (part Value Fund will invest $15 million in Chilean eq- of Germany's Viag group) plans to open a large uities. The West Africa Growth Fund hopes to cylinder head and engine block plant later this raise $26-40 million to invest in listed and un- year, and General Motors, Suzuki ofJapan, Audi listed securities in West Africa. The IFC holds of Germany, Ford, ITT Automotive, and United Developing-country 25% of the fund, and Group CFD (French De- Technologies are among companies producing funds: top discounts velopment Bank) has invested $5 million. The in the country. Although Hungary's domestic car and premiums Commonwealth Development Corporation in- market is small, labor costs in the sector are one- Percentage diference between net vested $25 million in its new fund for privatized eighth of those in Germany, and the country's Percentage firms in Africa, with additional funds to be raised proximity to EU markets and generous tax al- difference from other commonwealth countries and on in- lowances make it an attractive site for car pro- Largest discunts ternational capital markets. duction. Flows to Russia remain small, with the Jupiter European Inv. Trust PLC services and resource sectors taking the bulk of (ordinary shares) -46.77 Foreign direct investment and FDI, mostly though joint ventures and foreign- JupiterInternational privatization owned subsidiaries. FDI to manufacturing has Trust PLC been limited, although as part of the privatiza- (ordinary shares) 45.85 Jardine Fleming FDI sets new record in 1995, tion process foreigners have recently been able Ja Pacific Ltd. -29.61 strong growth expected in 1996 to buy Russian companies. Lazard Vietnamr Fund Ltd. -29.58 According to a United Nations Report, world- Brazil's car industry has attracted a number of Thai Development wide flows of FDI soared to a record $325 billion foreign producers, and some analysts believe that by Capital Fund Ltd. -28.40 in 1995 from $222 billion the year before. Inflows the end of the century it will overtake Italy as the Largest premiums i Jupiter European Inv, to industrial countries totaled $216 billion, up world's fifth-biggest car maker. Mercedes-Benz re- Trust PLC (zero dividend from $130 billion in each of the previous two cently finalized terms for a $460 million car plant, preferred shares) 41.64 years. The US was both the largest host country and Fiat unveiled its Palio, a small car aimed at de- Henderson Eurotruet for investment ($74.7 billion) and the largest veloping countries, whose first production site is in preferred shares) 39.04 source of investment in other countries ($97 bil- Brazil. Iveco, Fiat's commercial arm, plans to build Templetoun Russa Fund Inc. 23.76 lion). Inflows to developing countries reached new truck plants in Brazil and Argentina. France's Korea Fund Inc. 14.07 $97 billion, but their share of total flows fell to Renault is starting work on a $700 million plant to Jupiter Internat onal 30% from 39% in 1994. China attracted the produce mid-size cars, and other players in the (zero dividend shares) 13.81 most, $38 billion. Inflows to Brazil increased 58% Brazilian market (Ford, General Motors, and Volk- Note- As of June 28. i 996. Source: Lipper International Closed- to $4.8 billion; inflows to Mexico fell to $4.1 bil- swagen) plan to update existing plants. End Funds Service. August 1996 Equity portfolio and foreign direct investment 0 Elsewhere, the world's big oil companies are re- for the privatization of Telefonica del Peru (see sec- turning to Venezuela after nationalization pushed tion on new equities), Hungary raised $142 million them out 20 years ago. The opening of the industry for Tiszai Vegyi Kombinat, and Egypt debuted with to foreigners by Petroleos de Venezuela (PDVSA), a $119 million offer for the partial privatization of the huge state oil company, has led to new explo- Commercial International Bank. Although a num- ration and production joint ventures. This year ber of deals are expected to come to the market dur- Amoco agreed to pay $10.7 million for exploration ing the second half of this year, proceeds from rights in a new area and to share half of the profits international public offers for privatization will with PDVSA, and a consortium of 14 oil companies probably not reach 1994's record $6.8 billion. agreed to pay $250 million for the right to explore Privatization activity continues in Poland. A 8 areas. PDVSA expects new foreign investment to number of cement factories are up for sale, includ- reach $13-15 billion over the next 4 years and pro- ing those controlled by the national investment duction to increase 80% over the next 10years.Vilet- funds established last year under the country's mass nam may amend foreign investment laws in privatization program. Under this program 15 October to ease licensing bottlenecks and improve funds were given a lead 33% stake in 35 companies access to finance. A five-year plan aims to attract for- and a minority 1.9% share in 510 firms. About 65% eign money to export industries and advanced tech- of Poland's 15-million-ton cement capacity is con- nology. So far, investment inflows have been trolled by foreign companies. Philip Morris pur- concentrated in the tourist, light industry, and ser- chased a 33% stake in ZPT Krakow, the country's vice sectors. largest cigarette maker, for $227 million. The com- Emerging markets are also becoming a growing pany plans to invest $145 million over three years to source of FDI outflows. The Republic of Korea was obtain an additional 32% share. The Polish gov- the largest overseas investor, with outward FDI of $3 emient requires Western firms to fulfill a package billion in 1995 and $1.5 billion in the first quarter of social guarantees, increasing salaries 30% in the of 1996. The average size of approved projects has first year of investment, guaranteeing employment increased dramatically, driven by growing invest- for three years, and sourcing 45% of their tobacco ments by large chaebols (conglomerates). Before from local growers. Several deals Nwere concluded in most investments came from small and middle-size other sectors of the economy: Carlsberg, a Danish firms. More than half of new investment is targeted brewery, bought a 31 % stake of Okocim Brewery for at Asia and more than one-third at China, although $51 million; B.A.T. Industries paid $88 million for the chaebols are also building large plants in Eu- Augostow; a French company acquired ZPT Radom rope and North America. Much activity has also for $64 million; and a German concern paid $130 moved to Eastern Europe to take advantage of the million for a stake in Wvtwornia Wyrobow Tyto- region's skilled cheap labor and proximity to Euro- niowych of Poznam. pean markets. Korean companies are also investing Several investments have been made in in Latin America; Asia Motors recently announced Kazakstan's metals and minerals sector, which plans for a $500 million factory to build pick-up accounted for 45% of export revenues in 1995. trucks in Brazil. A consortium of US, Canadian, and UK gold mining companies has agreed on the principle Privatization off to a slow start, terms to purchase Vasilkovskoye, the world's while direct sales continue fourth largest undeveloped gold mine. The con- International offers for privatization continued to sortium pledged to invest up to $360 million, to be sluggish in the second quarter. China was the pay a bonus of $85 million, and to provide undis- only active country, raising $500 million for the pri- closed royalties for an 80% stake in the mine. vatization of Guangshen Railways and Nanjing The Korean conglomerate Samsung bought Panda Electronics. Activity revived somewhat in 40% of the Zhezkazkantvetmet metallurgy plant July, when Peru raised an impressive $990 million and plans to acquire a majority share by the end M FinancialFlows and the Developing Countries Equity portfolio and foreign direct investment of 1996. Samsung has already invested $200 mil- wave, including the National Power Corporation lion and plans to invest $1 billion over the next and the Manila water system. 15 years. Trans-World Group, based in London, Venezuela plans to accelerate its privatiza- announced plans to build a new aluminum plant tion program, which has sold $2.6 billion in as- for $1.2-1.5 billion and to expand production at sets since 1990. For the year through July sales plant in the northern part of Kazakstan. The UK were only $130 million, with Soro's Quantum steel producer Ispat bought 15 coal mines for Parterns buying a 9.4% stake in Vbanco Provin- $182 million and a coal-fired power plant for cial for $55 million and Templeton Interna- $2.4 million, and plans to buy Karmet Works, tional investing $67 million for a 4.3% stake in the second-largest steel factory in the former So- Electridad de Caracas Saca, the country's viet Union, for $950 million. biggest electric utility. Banco de Venezuela is Over the past year most of Kazakstan's large being sold, and a number of foreign banks from metals mines and smelters have been sold off to Chile, Colombia, Europe, and Peru have ex- private investors, mainly foreigners. Foreign in- pressed interest. Other companies for sale in- vestment in the oil and gas sector (33% of export clude four aluminum companies owned by the revenues) also has been significant, including state holding company. Mobil Oil's 25% share of Tengizchevroil for $1.1 Brazil sold about 60% of Light, the Rio de billion, Chevron's 50% stake in Vitol, and the Janeiro power company, for $2.22 billion. A por- $230 million payment by a Dutch oil trader tion of the proceeds will be invested in the sec- group for a 90% stake in Chimkent Refinery. In tor. A consortium that includes Elecricite de addition, the US-based AES Corporation and France, Houston Power Industries, and AES Suntree of Israel acquired 70% of the coal-fired Corporation is the largest shareholder, with a Ekibastuz electricity generating plant. 34.7% stake. Brazil will offer 35% of the state- In 1997 the Philippines is expected to pro- owned Companhia Riograndense de Telecomu- ceed with the "third wave" of its privatization pro- nicaciones by the end of the year. Telefonica gram, to cover state pensions and government International, the overseas unit of Telefonica de social security funds. The program already has Espana, has formed a consortium with a Chilean disposed of the Philippine National Bank, the and a Brazilian multimedia group to bid for the National Steel Corporation, Philippines Airlines, company. Companhia Vale do Rio Doce and and the long-distance telephone company, al- Electrobras are also expected to be sold in the though some big items remain from the second future. * Official flows Multilateral flows commitments amounted to $14.5 billion (about two-thirds of the total) for 129 projects; $6.9 bil- World Bank commitments decline lion in IDA credits supported 127 projects. East slightly in fiscal 1996 Asia and the Pacific received the biggest share, World Bank commitments totaled $21.4 billion with $5.43 billion for fiscal 1996. in the fiscal year ending June 30, 1996, a slight The Multilateral Investment Guarantee decline from the $22.5 billion in fiscal 1995. Agency (MIGA) issued 68 investment guarantee These totals include both the market-rate loans contracts for $862 million in new coverage in fis- made by the International Bank for Reconstruc- cal 1996, compared with 54 contracts for $672 tion and Development (IBRD) and the conces- million in fiscal 1995. MIGA-insured foreign sional loans made by the International investment facilities were also higher in fiscal Development Association (IDA). IBRD loan 1996 ($6.6 billion, compared with $2.5 billion). August 1996 X Official flows - Investment guarantees were issued for the first approved during this quarter (compared with 34 time in Kuwait, Kyrgyz Republic, Mali, Nepal, grants, totaling $23.9 million, in the first quar- and Papua New Guinea. Significant coverage ter). The grants went to 13 developing countries went toward infrastructure projects, especially for project preparation, advisory, and opera- in power and telecommunications. tional purposes. Multilateral commitments up Bilateral ODA and export New lending commitments from multilateral credits agencies increased to $12.8 billion in the second quarter from $6.6 billion in the first (table 8). ODA for 1995 falls far below UN The World Bank's $10 billion in commitments targets accounted for 78% of the total and 89% of the Preliminary data indicate that members of the increase, as a large number of loans were pre- OECD's Development Assistance Committee sented to its board at the end of the fiscal year. (DAC) provided $58.8 billion in ODA in 1995, Brazil borrowed $650 million for two projects: compared with $59.2 billion in 1994. Although Federal Railways Restructuring and Privatiza- the drop is modest in nominal terms, the depre- Terms of coverage tion Project and To Improve Health Care to the ciation of the dollar in 1995 resulted in a 9.6% by mnajor export credit agencies Poor. fall in real terms. ODA equaled just 0.27% of the Score Score Under the railways project the Bank will fi- combined gross national product of DAC's mem- MLTP ST' nance half of a $700 million project to modern- bers, the lowest level since the United Nations Chile 93 90 ize Brazil's railroad, the largest in Latin adopted a target of 0.7% in 1970. Colombia 88 76 Egypt 86 83 America, and to improve federal fiscal accounts. Indonesia 91 78 The health project will support reforms to im- EXIM Japan finances projects in Morocco 87 68 Pakistan 86 75 prove the financial sustainability and efficiency Turkey and Slovakia Philippines 86 83 of the state-owned Unified Health System, Sis- Total commitments by the Export-Import Bank Tunisia 90 89 Turkey 87 66 tema Unico de Saude, the sole source of pub- ofJapan for the second quarter amounted to 153 Argentina 84 71 licly financed health care for 110 million billion yen. EXIM Japan lent Turkey 7.7 billion Brazil 81 62 people. yen, 60% of the cost to construct the Kangal China 82 74 Czech Republic 81 57 The Asian Development Bank approved Thermal Power Plant's third generating unit. Mexico 82 75 $731.2 million in loans and technical assistance The rest will be provided by a syndicate of private Romania 84 64 South Afrca 83 6I grants in the second quarter of 1996. Of 16 loans, Japanese and German banks. This project will Zimbabwe 75 72 the largest was to China for $178 million for the help meet the anticipated tripling or quadru- Ghana 71 65 second Industrial Energy Efficiency and Envi- pling in demand for electricity by residential and ndgary 69 63 ronment Improvement project. Forty-four tech- industrial users by 2010. Peru 61 73 nical assistance grants, totaling $45 million, were EXIM Japan also signed an agreement with Poland 73 70 Russia 63 58 the National Bank of Slovakia (NBS) for an un- Bulgaria 44 7 - Multilateral commitments to tied two-step loan totaling 10 billion yen. The EBcuuaadroar 45 6 1developing countries loan is intended to develop the country's Iran 45 58 US$ millions, in calendar year medium- to long-term financial markets by pro- Venezuela 59 60 1995 1996QI1 996Q2 Algeria 37 49 Total 4 52,982 6,590 i12,886 viding capital investment funds through the Angola 4 4 African Development Bank 296 18 0 NBS to Slovakia's commercial banks. In addi- Cote d'lvoire 12 48 Asian Development Bank 5,504 1,023 731 tion, the credit will improve the assessment abil- Iraq 0 0 Internat onal Bank for Reconstruct on Kenya 32 47 and Development 22,143 4,448 9,991 ity of the commercial banks that will on-lend the Nigeria 0 21 European Bankfor Reconstructon funds. EXIMJapan is providing 70% of the total Note. As of end-April 1996. and Deve opment 1,799 328 280 as well as guaranteeing the remaining amount, a. Medium-to long-term. Inter-American Development Bank 7,303 635 580 b. Short-term. International Monetary Fund 15,936 137 1,304 to be financed by a syndicate of six private fi- Source: World Bank and Berne private Union data. Source: Mulilateral ending institutes. nancial institutions. E Financial Flows and the Developing Countries * Official flows US EX-IM Bank backs $321 million uses. The Yellow River projectwill also mitigate seri- in sales for China power projects ous seasonal flooding that affects 103 million people The US Export-Import Bank authorized financing in China. US EX-IM Bank will provide a $55.8 mil- of power plant equipment for use in the construc- lion direct loan to the State Development Bank of tion of the Xiaolangdi dam project on the Yellow China and finance $263 million for the sale of equip- river in China's Henan province. The projectwill in- ment to Huaneng Power International, Inc. for the crease water for irrigation, industrial, and municipal second phase of Nantong City in Juangsu province. * Debt relief update Official creditors 10). In addition, the reduction in the present value of debt provided in earlier rescheduling Russia signs largest-ever Paris Club agreements was increased ("topped up") to agreement 67%. Russia concluded a stock of debt reduction Peru received a stock of debt rescheduling agreement with its Paris Club creditors in April that covers loans contracted before 1983, in- 1996 that covered $40.2 billion in debt (table cluding (with some exceptions) previously 10).Theagreementwasthelargestnegotiatedby rescheduled debt under the 1991 and 1993 the Paris Club in its 40-year history. For debt ser- agreements. A percentage of the debt service due vice not previously rescheduled, the agreement from April 1996-December 1998 was resched- reschedules principal and interest falling due in uled, with the share depending on the year due. 1996-98 (and 40% of that falling due in Jan- That is, 100% of principal and interest (exclud- uary-March 1999) on debt contracted before ing late interest) due from April-December 1991, with repayment starting in 2002 and end- 1996, 85% due in 1997, and 50% or 60% (de- ing in 2020. pending on whether the debt had been resched- Principal and interest due in 1996-98 on debt uled previously) due in 1998 was rescheduled. contracted during 1991 was also rescheduled, with The agreement also rescheduled a portion of the repayment starting in 2002 and ending in 2016. The stock of debt due in January 1999 as a result of agreement also rescheduled principal payments re- sulting from earlier Paris Club agreements (includ- - . Paris Club rescheduling agreements, January-July 1996 ing debt falling due in 1996-98 and the stock of debt US$ millions in 1999), with repayment starting in 2002 and end- Dote Consolidated Cut-off Consohdation ing in either 2016 or 2020. All debt was rescheduled Country of agreement amount dote period through Terms Zambia 27 Feb 96 566 Jan 83 31 Dec 98 Naples at marker rates, as agreed on a bilateral basis. The Honduras 29 Feb 96 112a 6 Jan 90 31 Jan 97 Nap esb Russian government pledged to seek to obtain com- Sierra Leone 25 Apr 96 .. I Jul 83 31 Dec 97 Naples parable treatment of debt owed to non-Paris Club Russian 5Apr96 40,200. Jan 91 stock Graduated Federation payments creditors. Ghanar' 29 Mar96 .. Jan 83 d Graduated payments Mali 20 May 96 33 I Jan 88 stock Naples Paris Club stock of debt operations Guyana 23 May 96 793 31 Dec 88 stock Naples negofiated Burkina Faso 20 Jun 96 .. 30 Jun 89 stock Napes Chad' 20 Jun 96 .. Jan 91 31 Dec 97 Nap es Five Paris Club agreements were signed during Congo 16 Ju 96 .. Jan 86 20 Jun 99 Nap es May-July 1996. Burkina Faso, Guyana, and Mali Peru 20Ju 96 .. Jar 83 stock e Not availab e. negotiated stock of debt agreements on Naples a. Ircludes a six-month extensio n the consoldation period. terms that provided for a 67% reduction in the b. 50% reduction on maturt es. c. Terms of reference of the agreement. present value of previously unrescheduled debt d. Incrudes only arrears as ofJuy 1, 995. e. Repayment profiles tailored to maintain a certain amount of debt service. contracted before the cut-off date (see table Source: Word Bank. Augwst 1996 Debt relief update A the 1991 agreement, with some adjustment of Commercial creditors the repayment schedule provided for if Peru's GDP growth exceeds specified levels. Implemen- Russia reaches agreement with tation of the agreement is conditioned on com- London Club creditors pliance with International Monetary Fund Russia has reached an agreement in principle to programs. restructure about $33 billion ($25.5 billion in The Congo signed a flow reduction agree- principal and $7.5 billion in accrued interest) of ment on Naples terms covering debt service due the debt it owes to London Club creditors. through June 1999 on loans contracted before Under the proposed restructuring, Russia would 1986, including the bulk of repayments of inter- repay its commercial bank debt over a 25-year pe- est and principal previously rescheduled from riod (with a 7-year grace period) ending in 2020. the 1986, 1990, and 1994 agreements. Some Interest would be charged on principal plus ac- creditors provided a 67% reduction in the pre- crued interest at a rate of 6-month LIBOR plus sent value of eligible debt service, while others 13/16%. chose the long maturities option. The Paris Club Russia would also pay $2 billion up front into agreed to consider a stock of debt reduction after two trust accounts to cover interest arrears(of June 1999 if the Congo remains in compliance which $1.475 billion has already been paid by the with its IMF program and meets the terms of the Russian government and a further $475 million present rescheduling agreement. will be paid in monthly installments of $95 million until the end of 1996. Full interest payments on Nicaragua and Russia reach restructured debt would not begin until 2002. preliminary agreement on debt Until then, a graduated scale of interest payments In April Nicaragua reached a preliminary agree- would apply, with the difference between actual ment with Russia on a reduction of its outstand- payments and interest due to be capitalized by in- ing debt. The operation would forgive 90% of creasing the principal amount of the interest Nicaragua's ruble-denominated debt (at an ex- notes. These notes would cover unpaid eligible in- change rate of $1 to 0.64 rubles) and reschedule terest at closing plus interest capitalized under the the remainder over the next 15 years at a rate of restructuring agreement and would be dollar-de- LIBOR plus 40 basis points. The agreement pro- nominated with a 20-year maturity and 7 years' vides for limits in repayments by Nicaragua dur- grace. A critical mass (that is, minimum sub- ing the first five years, with unpaid amounts scribership) of $20 billion of outstanding princi- added to the stock outstanding. It also was pal will be required to trigger the rescheduling agreed that the interest rate would not fall below and is expected to be achieved. The deal is ex- 4% or rise above 8%. pected to be finalized by early December 1996. E~~~ Stock markets and Bank research project investigated the effect of development stock markets on economic growth, their impact on firms' financing decisions, and government Stock markets in developing countries have policies to foster development of stock markets.1 boomed. Over the past decade the capitalization Stock markets and economic growth. The evi- of emerging markets increased 20-fold and their dence suggests that a liquid stock market in- share of global trading rose from 3% to 17%. creases long-term economic growth by easing This rapid growth raises critical questions for de- firms' access to funds for investment. Many prof- veloping-country policymakers. A recent World itable activities require a long-run commitment E Financial Flows and the Developing Countries Financial brief of capital, yet investors are often reluctant to re- to faster economic growth, even after accounting linquish control of their savings for long periods. for nonfinancial factors such as inflation, initial In liquid stock markets savers hold an asset that income levels, political stability, investment in they can sell quickly and cheaply, while firms education, the black market exchange premium, have permanent access to the capital raised and the efficiency of the legal system. through equity issues. Thus, by making long-run Interestingly, however, other measures of commitment of finance more attractive, liquid stock market development show no strong rela- stock markets boost investment. Liquid stock tionship with growth. For example, the ratio of markets also allow growing firms to diversify risk market capitalization to GDP is a poor predictor and avoid excessive dependence on debt. In ad- of future economic performance. And contrary dition, stock markets convey information about to what some pundits suggest, greater stock firms, strengthening investors' and creditors' price volatility does not presage poor economic corporate control and spurring managerial com- performance. petency. For all of these reasons firms with access Stock markets andfinancing. The initial level of to a well-functioning stock market are likely to be stock market development significantly affects larger and to grow more rapidly than otherwise, firms' choices between debt and equity to fi- enabling the economy to benefit from econ- nance expansion. As countries with an initially omies of scale. low level of stock market development increase A recent study divided 38 countries into 4 the size and liquidity of their markets, debt-eq- groups according to the liquidity of their stock uity ratios rise (figure 12). That is, firms in these markets, as measured by the total value of equity economies issue new equity but borrow in traded as a share of GDP. The 9 countries with amounts even larger than the value of that eq- very liquid markets in 1976 grew much faster uity. But as stock markets continue to develop, over the next 18 years, on average, than the coun- debt-equity ratios decline, with firms relying tries with illiquid markets (figure 1 1). This find- more on equity and less on debt. This pattern ing suggests that stock market liquidity is related suggests that at early stages of market develop- lnitital value traded ratio : . Leverage and stock market and long-run growth, 1976-93 development Average annual per capita GDP growth percentage US$ millions 3.4% Debt-equity ratio 3.0 2.8% 2.5 2.0 1.8% 1.8% '.5 1.0 0.5 0.0 Very lliquid Illiquid bquid Very liquid Less More Initiol liquidity: volue troded/GDP developed developed Stock market development (size ond liquidity) Note Equtyfgures Include domestCtranches -- Source Internat,ona , nance Corporation. Source DemirgOc-Kunnt and Maks mao,c 1996 Aug-ust 1996 Financial brief ment the improvements in information, moni- tional investment barriers may improve the op- toring, and corporate control induced by stock eration of domestic capital markets. markets may help persuade creditors to lend Evidence from a sample of 14 countries that lib- more, so that debt and equity finance are com- eralized international capital flows supports this plementary. As development continues, equity view. In 12 countries stock market liquidity rose sig- becomes a more attractive source of finance. nificantly after liberalization. Interestingly, stock Thus policies to develop stock markets need not market volatility rose significantly in 7 of these cases undermine existing banking systems. Indeed, and did not fall significantly in any of them. Thus even at relatively high levels of stock market de- liberalizing capital flows appears to expand oppor- velopment higher economic growth permits tunities for long-run economic growth through banks to increase the volume of their business greater market liquidity, provided that policvmak- even as their share of total finance declines. ers are prepared to deal with increased market Policies. What policies foster stock market de- volatility. Other measures that can foster stock mar- velopment? Reducing barriers to cross-border ket development include the removal of tax, legal, capital flows may increase market liquidity and and regulatory barriers, and the enforcement of enhance the functioning of emerging stock mar- standards for accounting and disclosure. There is kets. Domestic firms seeking foreign investment no evidence, however, that more interventionist often have to improve their accounting systems policies, such as tax incentives for firms that go pub- and the quality of the information they disclose lic, increase liquidity or economic development. to investors. As more foreigners enter the mar- Moreover, not every country needs to have its own ket, there also may be pressure to upgrade the stock market. It is the ability to trade and issue se- trading apparatus and legal system to support curities easily that aids long-run growth, not the more trading and the trading of additional fi- physical location of the market. nancial instruments. Increased integration with world capital markets also tends to squeeze out 1. Some of the findings from this project were pre- distortions in the prices of domestic securities. sented in a series of articles in the May 1996 issue of the Through all these channels, lowering interna- World Bank Economic Review. W Financial Flows and the Developing Countries U Statistical appendix New bond issues for 1 996Q2 Bonds greater then US$ 150 million US$ equivalent nominml Issuer amount Industry Issue Issue Spread Final netonality (millions) Issuer Issuer type sector' Currency pnce type at launch coupon Motunty Mexco .750 United Mexican States Government SG US$ 92.93 Fxed 552 S1 1500 30 years Mexico 949 United Mexican States Government SG yen 100.00 Fixed 6.750 10 years Korea, Rep. of 750 Korea Deve opment Bank Public BF US$ 99.24 Fixed 74 7.250 10 years Brazil 7i4 Companhia Energetica de Sao Paulo Pub ic EU DM 101.45 Fixed 398 9.250 5 years Turkey 702 Republic of Turkey Government SG yen 100.00 Fixed 5.700 5 years Ch na 700 People's Republic of China Government SG US$ 99.57 Fixed 80 7.375 5 years Turkey 500 Republic of Turkey Government SG US$ 99.90 Fixed 210 8.250 3 years Romania 497 National Bank of Romania Government CB yen 100.00 Fixed 280 5.200 3 years Argentna 460 RepublicofArgentina Government SG yen 100.00 Fixed 5.500 4 years I months Brazil 413 Banco Naci6nal de Desenvolvimento Pub ic BF yen 100.00 Fixed 5.500 5 years Economico e Social-BN DES Columbia 400 Republic of Colombia Government SG US$ 99.78 Fixed 150 8.000 5 years Argentina 375 Repubi c of Argentina Government SG yen 100.00 Fixed 5.500 4 years I0 months Hungary 333 National Bank of Hungary Government CB DM 99.90 Foating 3-month 6 years LIBOR+0.90% Argentina 327 Republic of Argentina Government SG DM 100.75 Fixed 535 11.750 I 5 years Argentina 327 Republic of Argentina Government SG DM 10.1.05 Fixed 275 7.000 3 years Argentina 324 Republ c of Argentina Government SG DM 101.40 Fixed 511 1 1.750 14 years II months Mex co 300 Petroieos Mexicanos Public OG US$ 99.71 Fixed 90 8.000 2 years Mexico 300 Grupo Televisa SA de CV Private MP US$ 52.61 Fixed 0.000 12 years Turkey 285 Republic of Turkey Government SG yen 100.00 Fixed 6.000 6 years Indonesia 260 Polysindo Intemational Finance BV Pnvate FC US$ 99.56 Fixed 450 11.375 10 years Mexico 250 BNCE Trust Division as Trustee Public IT US$ 99.18 Fixed 470 11.250 10 years of Fideicomiso Huites Co umbia 250 Financiera Energetica Naci6nal SA Public EU US$ 99.30 Fixed 250 9.375 10 years Brazil 250 Centrais Eletricas Brasileiras Private EU US$ 99.25 Fixed 338 10.000 8 years SA-Eletrobras Czech Republic 250 Komercni Finance BV Private BF US$ 99.55 Fixed 78 7.125 5 years Argentina 226 Repub ic of Argentina Government SG lira 100.78 F xed 1 1.000 3 years Romana 225 National Bank of Roman a Govemment CB US$ 100.20 Fixed 305 9.750 3 years Thailand 200 Total Access Communications Private TC US$ 100.00 Convertible 2.000 10 years Public Co. Ltd. Korea, Rep. of 200 Korea Long-Term Credit Bank Private BF US$ 99.90 Floating 6-month 3 years LIBOR+0.25% Korea. Rep. of 200 Korea First Bank Private BF US$ 100.00 F oating 6-month I0 years LIBOR+0.85% Korea, Rep. of 200 Hani Bank Ltd. Private BF US$ 100.00 Floating 6-month 3 years LIBOR+0.30% Korea, Rep. of 200 Export-import Bank of Korea Public BF US$ IC0 1.04 Fixed 47 7.250 5 years Mexico 200 Grupo Televisa SA de CV Private MP US$ 100.00 Fixed 465 11,375 7 years Mexico 200 Grupo Televisa SA de CV Private MP US$ 100.00 Fixed 515 1 1.875 1 0 years Indonesia 200 Sampoerna International Finance BV Pnvate FC US$ 99.97 Fixed 145 8.375 10 years Brazil 191 Occ dente y Caribe Celular SA Prvate TC US$ 52.43 Fixed 14.000 7 years 9 months Korea, Rep. of 190 Korea Deve opment Bank Pubiic BF yen 100.25 Fixed 2.770 5 years Korea, Rep. of 187 Samsung Electron cs Co. Ltd. Private EC yen 100.00 Fixed 3.300 7 years Korea, Rep. of 186 Housing & Commercial Bank Private BF yen 100.10 Fixed 2.300 5 years Brazil 185 Multicanal Particapoes SA Private TC US$ 100.00 Fixed 12.625 8 years Phil ppines 175 Philippine Long Distance Private TC US$ 99.68 Fixed 240 9.250 10 years Telephone Co. Chile 70 Empresa E ectrica Pehuenche SA Private EU US$ 99.72 Fixed 90 7.300 7 years Argent na 169 Repub ic of Argentina Government SG DM 101.63 Fixed 475 1 .250 10 years Brazil 164 Brazil Repackaged Bonds Pnvate FR DM 96.25 Fxed 633 11.000 9 years 0 months Brazil 151 RepublicofBrazil Government SG Estg 100.39 Fxed 250 9.750 3 years a. AM is automotive, BF is banking-financial servces. CB Is centra bank, CM s chemicals, CN is constructon, EC is eectroncs-electrical, EN is engineering, EU is energy-utility, FC Is financial corporate, FD is food and drink, FP is forest products-packaging, FR is financal repackaged. HC is healthcare-pharmaceutical, IC s industrial-conglomerates. IS is iron-stees, IT s investment trust-company, LA is local authority, MA iS manufactur ng, MO is metals and ores, MP is media-publishing, OG is oil-coal-gas, RC is retailing-consumer goods. RE is real estate, RL is railways, RP is rubber-plastics, SG is state authorty-government, TB is tobacco, TC is telecommunications, and TX is texti es-clothing, Source Euromoney Bondware. August 1996 f Statistical appendix aD,,A' .New loan issues for 1996Q2 Loon amount greater than US$ 150 million us$ Borrovwer Borrower equivolent notionality Borrower name type Currency amount Maturity Morgin' Indonesia Anglo-American Corp. of South Africa Ltd., A.R.H, Ltd S.A. Private US$ 1,000,000 5 years LIBOR: 40 bp, LIBOR: 25 bp Indonesia Billiton Finance BV Private US$ 650,000 5 years LIBOR: 55 bp Korea, Rep. of Republic of Indonesia Government US$ 500,000 8 years LIBOR: 62.50 bp South Africa PT Citra Bhakti Margatama Persada Private IDR0 399,527 12 years Mexico Nacional Financiera SNC (NAFINSA) Public US$ 315,000 I year LCCOMM: 140 bp Mexico Khanom Electricity Generating Co. Ltd. Private US$ 265,000 12 years LIBOR: 60 bp Thailand PT Citra Mataram Satriamarga Persada Private IDR0 258,647 10 years n.a. Argendna Standard Bank of South Africa Ltd. Private US$ 250,000 I year LIBOR: 35 bp Hungary Petroleo Brasileiro SA (PETROBRAS) Public US$ 250,000 I year N.A Indonesia PT Kiani Kertas Private US$ 229,500 7 years n.a. Brazii Saudi Aramco Mobile Refning (Samref) Private US$ 225,000 5 years n.a. South Africa APP lntemational Finance Co. Private US$ 200,000 3 years SIBOR: 150 bp Indonesia Banco Brasileiro de Descontos SA (BPADESCO) Private US$ 200,000 I year n.a. Indonesia Banco Bradesco SA (Grand Cayman) Private US$ 200,000 I year n.a. Malaysia Turkiye Garanti Bankasi AS Private US$ 200,000 < I year n.a. Poland Industrial Credit & Investment Corp. of India Public US$ 200,000 5 years LIBOR: 65 bp South Africa Edesur SA Private US$ 180,000 2 years LIBOR: 238 bp Indonesia PT Grand Paradise Private US$ 80,000 8 years SIBOR: 200 bp Saudi Arabia PT Kiani Kertas Private US$ 180,000 10 years n,a. Brazil Amsteel Mills Sdn Bhd Private US$ 180,000 5 years SIBOR: 138 bp Brazil Netia Telekom Private US$ 180,000 10 years n.a. India Pannon GSM Telecommun cations Rt Private US$ 175,000 5 years n.a. Indonesia Avance de Telecommunicaciones Latinoamericano Private US$ 165,000 6 months LIBOR: 125 bp Turkey Samsung Electronics Co, Ltd. Private US$ 155,000 5 years LIBOR: 40 bp n.a. Not applicable. a. LIBOR is London interbank offered rate; LCCOMM s letter ofcreditcommssion; SIBOR is Singapore interbankoffered rate. b. Indonesian rupiah. Source: Euromoney Loanware. Financial Flows and the Developing Countries * Statistical appendix TB/ .B New equity issues for 1 996Q2 US$ equivalent nominal Issuer amount Shore Offer nationality (millions) typec Issuer pnce Argentina 20 A,I,M,X DscoSA 15.75 69 A,I,M,X Disco SA 1 5.75 10 I,M Disco SA 5.25 18 I,A,X Siderar SAIC 17.00 59 IX Siderar SAIC 2.1 3 Total 1 78 Cnina .73 A,I,V,M,X Guangshen Railway Co. Ltd 19.00 2 7 A,l,V,M,X Guangshen Railway Co. Ltd. 1 9.00 83 I,V,M Guangshen Railway Co. Ltd. 2.94 53 I,M,V,X Nanjing Panda Electronics Co. Ltd. 2.13 13 I,M,V Nanj ng Panda Electronics Co. Ltd. 2.13 40 I,X Wuxi Little Swan Co. Ltd. 4.46 Total 580 Chile 4 A,M,X Banco BHIF 19.00 41 A,M,X Banco BHIF 19.00 60 M Banco BHIF 779.61 17 A,M.X Santa Isabel SA 26.00 69 A,M,X Santa Isabel SA 26.00 Total 201 Czech Republic 49 G,X Ceska Sporitelna AS 9.54 55 G,X Komercni BankaAS 26.40 Total 1 04 Hungary 26 X Panonplast Muanyagipari RT 3,800.00 Total 26 Indonesa 5 A,I,M,X Pasifik Satelit Nusantara PT 20.00 58 A,l,M X Pasifik Satelit Nusantara PT 20.00 0 I Ramayana 3,200.00 Total 83 India 20 G,X Bharat Hotels Ltd. 15.00 Total 20 Korea, Rep. of 100 G,X Hyundai Motor Co. 12.80 135 A,M,X Korea Mobi e Telecommun cations Corp. 16.13 203 A.M,X Korea Mobi e Telecommun cations Corp. 16.13 Total 438 Peru 38 A,X,M Compania de Minas Buenaventura SA 1 6.25 58 A,X,M Compania de Minas Buenaventura SA 16.25 II M Compania de Minas Buenaventura SA 19.60 Total 107 Ph lippines 62 B,X C&P Homes Inc. 20.25 50 I,X Hi Cement Corp. 0.35 77 I HI Cement Corp. 9.00 Total 1 89 Tha iand 15 I Bangkok Entertainment 142.00 395 I Bangkok Entertainment 142.00 Total 41 Note: Numbers may not sum to totals shown because of round ng. a. A is Arnerican depostory, B s bought deal block, F is fund, G is global depository, s inta public offer, M s multitranche, V s privatization. and x s Crossborder. Source: Euromoney Bondware. August 1996 E Statistical appendix .., X Bank and trade-related nonbank claims US$ millions 1995Q2 Trade-related Bank Guaranteed nonbank Country group or country 1990 1991 1992 1993 1994Q4 Total claims cloims claims All developing countries 749,424 788,765 826,525 839,916 913,770 1,002,102 808,634 127,990 193,468 EastAsia and Pacific 148,577 173,722 198,924 218,659 272,152 320,285 279,308 27,306 40,977 Europe and Central Asia 184,089 189,401 189,423 193,113 198,648 223,760 18 1,936 34,523 41,824 Latin Amercaand the Caribbean 238,974 244,805 257,599 258,058 264,789 268,469 229,348 30,264 39,121 Middle East and North Africa 94,922 100,018 95,751 92,040 95,363 100,703 62,599 21,345 38,104 South Asia 22,489 21,566 25,083 23,265 26,376 28,885 23,434 6,516 5,451 Sub-SaharanAfrca 60,373 59,253 59,745 54,781 56,442 60,000 32,009 8,036 27,991 Severely indebted middle-income 293,609 301,776 304,386 301,757 306,722 313,652 245,870 37,517 67,782 Algeria 21,014 21,805 18,661 18,208 20,833 22,840 14,935 9,931 7,905 Angola 2,370 2,680 3,453 3,167 2,904 2,841 1,558 532 1,283 Argentina 34,475 36,356 39,640 35,67 39,300 41,159 34,288 3,380 6,871 Bol via 463 534 604 691 681 725 400 48 325 Brazil 76, 67 71,931 74,069 76,872 70,978 75,058 65,128 3,624 9,930 Bulgaria 9,348 8,909 8,067 7,140 3,888 4,080 3,175 462 905 Gabon 2,161 2,051 1,952 1,828 ,867 1,757 665 138 1,092 Ecuador 4,773 4,553 4,198 3,661 3,926 3,556 2,864 370 692 Jama ca 975 737 753 717 865 866 602 144 264 Jordan 3,657 3,297 2,869 2,700 2,655 2,728 1,451 668 1,277 Mexico 62,684 72,485 75,687 78,819 85,992 82,181 73,203 13,839 8,978 Panama 22,855 22,926 22,725 23,955 26,235 26,859 26,476 158 383 Peru 6,179 6,143 6,423 5,972 6,357 7,312 4,192 207 3,120 Poland 26,301 27,099 25,569 23,734 20,929 21,167 7,855 2,255 13,312 Syrian Arab Republic 1,219 1,107 1,034 1,229 1,269 1,358 599 62 759 Severely indebted low-income 54,788 54,188 54,634 53,048 52,688 56,342 31,175 4,582 25,167 Moderately indebted low-income 38,617 37,266 39,003 35,387 37,584 40,046 26,987 8,039 13,059 Moderately indebted middle-income 210,629 216,913 228,835 225,201 234,471 256,247 21 0,8 19 46,675 45,428 Selected countriesa 347,822 381,356 410,694 430,990 493,271 545,526 458,768 74,704 86,758 Ch le 9,823 9,149 11 ,1 88 11,293 1 3,666 13,804 1 2.475 775 1,329 China 34,430 41,38 48,566 56,299 66,697 72,286 60,905 11,303 11,381 Colombia 8,889 8,479 8,795 9,244 10,352 1 1,111 9,788 1,408 1,323 Cote d'lvoire 4,379 4,042 3,986 3,625 3,566 3,676 2,092 268 1,584 Egypt 14,224 13,569 1 1,886 10,448 10,054 10,383 3,185 1,399 7,198 Hungary 12,359 11,15 9,289 8,004 8,761 9,508 8,660 848 848 India 15,640 15,383 18,60 16,460 18,489 19,375 16,373 3,892 3,002 Indonesia 34,850 39,773 46,967 44,730 50,251 56,831 46,559 6,750 10,272 Korea, Rep. of 36,216 41,820 44,598 47,078 63,454 79,029 75,493 2,048 3,536 Malaysia 9,252 10,062 12,886 17,937 17,0 2 8,837 16.751 1,895 2,086 Morocco 8,002 8,053 7,994 7,410 7,747 8,265 5,555 2,664 2,710 Nigeria 12,796 12,896 13,386 12,348 12,462 13,934 3,893 1,743 10,041 Philippines 11,969 11,839 11,063 10,715 1 1,370 12,499 7,581 2,408 4,918 Thailand 18,035 24,953 30,552 37,872 59,581 76,729 70,333 2,712 6,396 Turkey 22,230 23,094 24,425 29,238 24,564 26,534 22,432 8,363 4,102 Uruguay 2,226 1,991 2,581 2,776 2,483 2,436 2,329 162 107 Venezuela 19,032 19,475 20,158 18,672 16,167 15,969 14,1 10 5,122 1,859 Offshore banking centers 114,937 119,142 135,967 147,872 154,538 178,309 169,755 4,468 8,554 Oil exporters 176,696 185,856 187,950 133,775 134,928 141,947 91,988 28,345 49,959 DRS reporters 132,264 139,563 142,242 87,385 83,086 86,542 54,129 24,988 32,413 DRS reporters 636,246 673,182 708,689 781,915 853,755 935,873 771,474 118,721 164,399 Note: See country classifcations at the end of this statistical append x. a. Most of these countries are also included in the indebted country groups. Source: OECD; Bank for International Settlements, Stotistics on Extemra Indebtedness. E Financial Flows and the Developing Countries * Statistical appendix T,:~ l,. ' Commercial bank claims on developing countries US$ milhrins Cairms Liabilities Country group or country 1995QI 1995Q2 1995Q3 1 995Q4 1 995Q I 1 995Q2 1995Q3 1995Q4 All developing countries 792,626 82h1.698 842,437 837,221 665,774 688,718 711 h030 70!h944 EastAsiaandPacfic 257,187 2778 3 297,317 3 18,161 117037 120,356 125,832 108,457 Europe and Centra Asia 172,806 177,692 178,400 182,549 137,911 138,356 150,478 152,350 LatinAmericaandtheCaribbean 229,957 233,861 235.497 209,17 163,098 176,608 191,636 197,815 Middle East and North Africa 75,003 73,961 71h920 67,739 52,368 156,610 149,486 147,167 South Asia 24,599 25,862 26,751 26,100 59,184 60,068 57,515 59,948 Sub-SaharanAfrica 33,074 32,509 32,552 33,501 36,176 36,720 36,083 36,207 Severely indebted middle-income 250,623 252,137 251,906 223,616 165,665 181,671 195,915 199,257 Algera 14,416 3,820 13,053 12,675 3,780 3,485 3,319 2,990 Angoa 1,48 475 1,497 1,540 555 731 611 708 Argentna 33,259 34,212 34,081 35,071 19,864 20,986 21,646 23,971 Boliva 408 400 420 407 939 865 911 1,047 Brazil 62,673 64,719 68,353 38,514 37,535 47,727 58,540 58,086 Bulgaria 3,275 3,144 2,952 2,852 1,650 1,671 1,816 1,860 Gabon 716 663 596 641 733 757 731 705 Ecuador 2,801 2,842 2 943 2,988 3,236 3,487 3,196 2,720 Jamaica 590 599 602 655 853 988 1,096 1,049 Jordan 1,376 1,277 1,269 1,328 6,320 6,584 6,700 6,667 Mexico 74,336 73, 61 70,697 70,9 17 24,181 25,641 27,531 30,278 Panama 34,872 35,371 34,427 34,365 41,941 42,306 42,390 41,007 Peru 3,492 4, 72 4, 35 4,621 4,775 4,792 4,313 4,395 Po and 7,390 7,216 8,022 8,052 10,267 12,050 13,181 13,532 Syran Arab Repubilc 603 594 586 558 6,374 6,756 7,046 7,483 Severely indebted low-income 30,537 30,854 29,512 29,968 37,419 36,643 35,605 36,467 Moderately indebted low-income 25,417 26,578 27,179 26,437 53,447 53,653 52,888 49,942 Moderately indebted middle-income 199,756 205,417 206,617 213. 194 130,081 129,749 134.285 137,472 Selected countriesa 430.639 450,466 467,471 489,133 257,572 260,49 269,122 251,348 Chile 11,983 12,389 12,768 14.330 12,138 12,303 1 1428 11,796 China 58 292 60,162 61,564 66,482 59,492 57,288 57.803 59,529 Colombia 9.399 9,733 10,279 10.800 7,639 7.568 7,522 8,109 C6te d'lvoire 2,031 2,037 1,994 1,959 2,784 2,1 1 1 2,149 2,1 13 Egypt 3. 69 3,152 3,014 3,101 29,049 29,395 29,305 27,293 Hungary 8.838 8,569 8,148 8,033 2,122 2.137 1h846 2,551 India 5,790 16,306 16,667 6.060 13.707 2,912 12,751 12,751 Indonesia 44,307 46,381 48,466 51.015 10,555 12,323 1 1,387 1 1,632 Korea, Rep. of 69,176 75,615 79,329 83.265 21.196 20.226 24,181 2,936 Malaysia 6,215 16,747 16,733 17,760 8.620 1 1.581 11,853 13,101 Morocco 5,214 5,554 5,481 5,030 6.765 6,784 6,509 6,230 Ngeria 3.594 3,65 3,211 3,076 4.586 4,615 3,711 4,013 Phil ppines 6,624 7,333 7,370 8,071 6.676 7,232 6,507 7,377 Thailand 60,848 69,906 82,196 89,541 8,383 9,366 11,547 11,274 Turkey 18,361 18,803 19,882 20,261 2 797 22,045 24,560 23,080 Uruguay 2,213 2,3 0 2,359 2,842 5,678 5,837 5,558 5,949 Venezuela 13,260 12,701 12,100 1 1,787 20.867 20.263 21,722 20,525 Offshore banking centers 1,238.082 1,316,780 1,276,984 1.279,804 1,075,658 1.102,709 1,073,833 1,086,012 Oil exporters 105.895 106,272 101,79 00,044 174.221 179,771 169,768 169,736 DRS reporters 51,832 5 .242 49,224 48,529 44,686 44,521 45,135 44,939 DRS reporters 747,134 776;666 795,852 790,871 556,906 576.523 602.786 586,822 Note See country classificatons at the end ofth s statstcal append x. a. Most of these countres are also included in the ndebted country groups. Source. Bank for Internat onal Settlements, Interntional Banking and Financial Market Developments August 1996 Statistical appendix Commercial bank claims on developing countries, by country of origin US$ mili/ons Conado Francea Country group or country 1993 1994Q4 1 995Q I 1995Q2 1991 1992Q3 1992Q4 1993QI All developing countries 17,430 15,821 16,860 17,770 78,712 85,008 77,821 77,192 EastAsia and Pacific 1,969 2,364 2,317 2,341 14,303 17,026 15,012 16,979 Europe and Centra Asia 490 302 304 287 16,932 18,917 18,25 16,736 LatinAmericaandthe Caribbean 14,128 2,220 13,061 13,817 17,399 18,292 17,184 16,592 Middle East and North Africa 295 342 313 465 17,371 17,467 15,524 15,269 SouthAsia 438 433 570 564 1,939 2,523 2,169 2,142 Sub-Saharan Africa I 10 160 294 296 10,769 10,782 9,68 9,474 Severely indebted middle-income 6,295 6,533 6,741 6,558 28,541 29,191 26,850 26,115 Algeria 2 34 24 17 5,775 5,287 4,613 4,656 Angola .. .. 730 744 745 628 Argentina 680 709 793 917 2,335 2,298 2,350 2,099 Bolivia .. 3 18 18 19 18 Brazil 2,736 2,383 2,422 2,388 7,885 8,292 7,693 7,447 Bulgaria 654 664 621 542 Gabon 825 884 751 744 Ecuador 164 152 167 125 Jamaica 14 12 10 7 Jordan 1,020 1,095 746 740 Mexico 2,312 2,926 3,004 2,714 2,357 2,849 2,610 2,669 Panama 234 225 240 276 2,530 2.596 2,623 2,627 Peru 73 87 87 90 640 629 571 508 Poland 259 71 172 154 1,321 1,425 1,308 1,288 Syrian Arab Repub ic 271 285 271 241 Severely indebted low-income .. .. .. 16 8,380 8,795 7,832 7,446 Moderately indebted low-income 224 264 335 250 4,895 5,437 4,577 4,536 Moderately indebted middle-income 1,441 1,522 1,635 484 18,763 19,436 19,016 17,022 Selected countriesb 5,671 6,803 6,985 6,579 33,827 36,943 33,002 34,163 Chile 476 540 598 607 437 539 543 513 China 255 473 410 49 3,769 4,645 4,512 5,716 Colombia .. .. .. .. 512 575 589 624 C6cte d'lvoire .. .. .. .. 1,936 2,065 1,793 1,412 Egypt .. .. .. .. 2,437 2,364 1,972 1,85 1 Hungary .. .. .. .. 217 175 153 144 India 224 264 335 250 1,362 783 ,451 1,328 Indonesia .. .. .. .. 2,537 2,692 2,431 2,541 Korea, Rep. of 843 885 969 940 4,573 5,904 4,664 5,205 Malaysia 381 297 234 248 455 712 659 694 Morocco .. .. .. .. 2,199 2,296 2,157 1,986 Nigeria 1,500 1,295 1,129 1,008 Philippines 266 297 322 223 1,389 894 811 731 Thailand 224 412 382 440 1,276 1,70 1,668 1,850 Turkey 1,928 2,077 2,093 2,072 Uruguay .. .. .. .. 130 186 162 190 Venezuela 688 675 709 649 1,367 1,386 1,309 1,150 Offshore banking centers 0,602 1 1,610 12,046 13,486 35,166 42,766 40,286 38,450 Oil exporters 1,088 1,383 1,420 1,432 21,848 22,671 21,364 19,901 DR5reporters 1,037 1,247 1,297 1,272 17,114 17,633 16,221 14,136 DRS reporters 2,255 1 1,908 12,802 13,226 68,657 74,763 68,084 68,609 * Financial Flows and the Developing Countries * Statistical appendix i 1 <. Commercial bank claims on developing countries, by country of origin (continued) US$ millions Germony Itoly Country group or country 1995Q2 1 995Q3 1995Q4 1996Q I 1994 1995Q I 1995Q2 1995Q3 All developing countries 180,203 181,841 189,294 193,656 27,346 27,800 28,386 27,491 East Asia and Pacific 27,700 28,502 32,765 35,266 52 51 46 43 Europe and Central Asia 72,985 72,386 72,533 73,534 7,954 8,485 8,683 7,956 Latin America and the Caribbean 32,933 34,597 34,766 34,900 9,234 9,602 9,451 9,274 Middle East and North Africa 17,337 17,070 16,985 16,537 619 669 633 597 SouthAsia 1 1,145 10,439 11,102 1 1,172 3,067 3,212 3,349 3,367 Sub-Saharan Africa 7,816 7,861 8,063 8,384 1,136 1,132 1,038 1,000 Severely indebted middle-income 38,053 39,297 39,696 40,076 8,184 8,541 8,399 8,003 Algeria 1,410 1,387 1,437 1,309 .. Angola ,, Argentina 7,782 8,495 7,897 7,698 3,469 3,926 3,912 3,174 Bolivia 445 433 431 416 8 8 4 2 Brazil 10,171 1 1,070 10,934 11,621 1,675 1,800 1,757 2,130 Bulgaria 1,219 1,200 1,150 1,126 341 363 373 346 Gabon 59 56 58 54 Ecuador 270 246 207 201 164 107 107 154 Jamaica .. .. Jordan 537 530 534 517 Mexico 5,009 4,815 5,369 5,160 1,622 1,529 1,462 1,490 Panama 2,251 2,426 2,908 2,694 .. Peru 1,057 982 975 942 161 166 187 212 Poland 2,093 2,019 2,041 2,251 744 642 598 495 Syran Arab Republic 655 645 645 691 Severely indebted low-income 6,459 5,330 6,429 6,673 722 673 644 598 Moderately indebted low-income 13,666 13,270 13,587 13,402 102 1 10 59 74 Moderatelyindebted middle-income 66,548 66,414 65,766 66,329 8,051 8,518 8,627 8,240 Selected countriesb 61,719 63,338 68,194 69,968 4,085 3,846 3,767 3,830 Chile 1,422 1,752 1,910 1,832 355 355 338 349 China 5,947 6,261 7,021 7,915 .. Colombia 1,577 1,716 1,902 1,866 412 385 368 388 C6te d'lvoire 365 358 379 369 12 12 13 17 Egypt 2,966 2,876 2,902 2,822 Hungary 4,329 4,224 4,340 3,997 213 224 281 256 India 8,174 7,892 8,139 8,195 .. Indonesia 6,824 7,058 7,497 8,164 .. Korea, Rep. of 7,278 7,717 8,732 9,462 Malaysia 1,448 1,233 1,326 1,291 Morocco 1,306 ,276 ,257 1,178 298 279 272 269 Nigera 687 569 553 497 710 661 631 581 Philippines 697 760 805 797 52 51 46 43 Thailand 4,414 5.222 6,318 6,649 .. Turkey 7,937 8,245 8,277 8,442 Uruguay .. .. .. 263 301 288 274 Venezuela 1,234 1,252 1,286 1,203 709 629 627 706 Offshore banking centers 101,783 106,256 122,347 131,402 21,483 20,321 19,565 20,869 Oil exporters 5,885 15,987 16,840 17,259 12,716 12,534 13,138 12,769 DRS reporters 8,836 8,656 8,499 7,829 7,431 7,884 7,953 7,515 DRS reporters 152,041 154,452 158,778 161,162 11,734 12,099 1 1,864 1 1,518 (table continues on next page) August 1996 Statistical appendix Commercial bank claims on developing countries, by country of origin (continued) US$ millions Netherlinds0 Switzernand Country group or country 1992 1993 l 994Q4 1995Q2 1992 1993 1994 / 995 All developing countries 21,291 22,902 26,533 29,655 23,769 25,453 28,698 29,451 EastAsiaand Pacfic 3,326 4,197 6,023 7,552 2,604 3,593 3,951 5,627 Europe and Central Asia 4,417 4,372 4,347 5,410 5,569 5,549 5,145 5,076 LatinAmericaandtheCaribbean 9,512 10,334 11,536 12,108 9,498 10,231 12,817 12,041 Middle East and North Africa 1,782 2,027 1,841 1,976 3,164 3,136 3,293 3,323 South Asia 905 486 1,353 1,000 718 975 1,019 1,485 Sub-Saharan Afnca 819 1,106 1,213 1,322 2,215 1,969 2,474 1,899 Severely indebted middle-income 7,312 7,872 9,264 9,867 1 1,897 12,144 14,406 13,001 Algeria 688 742 567 450 298 289 287 234 Angola .. .. .. .. 106 76 48 26 Argentina 1,439 1,425 1,622 1,732 1,604 1,365 1,821 2,970 Bolivia .. .. .. .. 16 25 43 47 Brazil 2,003 2,772 3,139 3,376 2,821 3,023 2,232 2,088 Bulgaria 248 264 75 40 Gabon .. .. .. .. 8 7 10 10 Ecuador 257 360 391 264 132 145 163 116 Jamaica .. .. .. 8 2 2 18 Jordan .. 106 82 96 110 Mexico 2,168 1,704 2,058 2,584 2,369 2,860 5,211 3,199 Panama 403 465 779 909 3,295 3,222 3,749 3,252 Peru .. .. 220 .. 172 ISI 203 535 Poland 353 404 488 551 443 390 188 76 Syrian Arab Republic .. .. .. .. 19 21 33 34 Severely indebted low-income 130 .. .. .. 1,870 1,651 1,687 1,525 Moderately indebted low-income 1,270 907 1,305 1,492 1,436 1,900 Moderately indebted middle-income 6,707 7,419 8,126 9,898 5,663 6,041 6,390 7,1 13 Selected countriesb 8,837 10,019 13,195 15,139 9,692 1 1,323 14,088 14,188 Chile 668 625 667 653 624 690 1,066 1,073 China 435 582 1,221 1,147 495 537 680 1,060 Colombia 537 613 749 765 291 374 561 625 C6ted'lvoire .. .. .. .. 100 99 115 84 Egypt .. .. 383 339 287 317 Hungary .. 354 63 77 88 78 India 971 472 417 631 538 971 Indonesia 1,659 1,768 2,353 3,265 317 593 742 1,128 Korea, Rep. of 775 670 863 1,229 775 662 904 1,264 Malaysia .. 282 475 474 150 509 295 313 Morocco .. .. .. .. 131 117 141 192 Nigeria .. .. 200 109 68 55 Philippines .. 315 439 532 121 165 158 403 Thailand 458 580 671 907 633 1,010 1,164 1,447 Turkey 731 1,308 1,373 1,537 1,617 1,534 1,295 1,295 Uruguay 546 659 757 697 106 218 242 180 Venezuela 719 831 787 771 839 844 629 641 Offshorebankingcenters 12,305 1 1,289 14,706 17,017 18,826 21,244 21,138 24,376 Oil exporters 3,984 3,237 2,357 2,282 5,291 4,398 4,586 4,826 DRS reporters 3,281 2,834 2,052 1,997 2,942 2,157 1,970 2,002 DRS reporters 14,723 16,605 21,204 23,456 23,264 26,189 29,295 30,825 Financial Flows and the Developing Countries * Statistical appendix [a 1 -.Commercial bank claims on developing countries, by country of origin US$ militons United Kingdom' United States' Country group or country 199 1992 1993Q4 1994Q4 1995Q2 1995Q3 1995Q4 1996QI All developing countries 46,495 45,689 53,300 58,214 91,972 96,548 98,498 101,881 EastAsiaand Pacific 5,956 6,066 10,100 13,075 18,343 19,583 21,627 22,816 Europe and Central Asia 9,736 9,355 10,043 10,845 8,418 8,552 8,626 9,266 Latin America and the Caribbean 17,527 18,061 21,365 21,302 58,271 61,145 60,920 62,086 Middle East and North Africa 4,203 3,425 4,205 5,209 3,004 3,450 2,782 3,030 South Asia 1,698 1,814 1,775 2,297 1,725 1,978 2,277 2,363 Sub-Saharan Africa 6,766 6,832 5,766 5,486 2,211 1,840 2,266 2,320 Severely indebted middle-income 17,764 17.487 20,168 20,487 46,254 48,345 48,31 1 49,562 Algeria 921 685 412 430 574 662 732 774 Angola 22 30 64 61 Argentina 2,738 2,797 3,088 3,883 10,884 11,101 11,31 1 11,309 Bolivia 6 1 7 49 59 117 121 140 1 56 Brazil 4,104 4,274 5,572 5,100 11,467 14,278 14,802 16,283 Bulgaria 233 191 231 47 27 73 1 18 Gabon 71 47 30 89 6 6 6 5 Ecuador 514 471 474 483 638 767 770 903 Jamaica 71 76 68 95 158 139 137 148 Jordan 357 270 302 282 58 62 60 34 Mexico 5,611 5,943 7,012 6,895 20,099 19,076 18,374 17,503 Panama 1,061 1.148 1,419 1,671 948 737 573 541 Peru 342 226 302 277 556 605 604 640 Poland 1,188 1,000 879 973 654 716 681 1,100 Syrian Arab Republ c 58 42 31 I I Severely indebted low-income 2,909 2,417 2,296 2,405 981 889 950 1,058 Moderately indebted low-income 2,770 2,592 2,652 3,136 1,582 1,869 2,095 2,135 Moderately indebted middle-income 12,517 12,870 14,548 14,833 21,143 22,195 22,861 23,069 Selected countriesb 19,988 19,877 25,679 28,072 52,793 53,885 55,297 55,709 Chile 704 582 729 920 3,924 3,831 4,307 4.051 China 1,031 942 2,369 3,223 1,199 1,475 1,732 1,973 Colombia 613 647 810 1,028 2,845 3,087 3,173 3,117 C6te d'lvoire 155 162 123 172 27 31 29 24 Egypt 594 430 726 796 109 110 117 129 Hungary 299 268 226 365 347 381 411 533 Ind a 1,164 1,207 1,162 1,507 1,243 1,467 1,615 1,542 Indonesia 1,231 1,253 2,031 2,467 2,464 2,887 2,909 3,316 Korea, Rep. of 1,842 1,827 2.281 3,357 7,538 7,554 8,120 8,863 Malaysia 605 689 1,094 1,1 1 1 1,103 1,196 1,536 1,395 Morocco 351 368 263 272 490 469 471 502 Nigeria 702 477 375 239 222 212 287 299 Philippines 717 761 885 702 2,703 2,787 3,018 2,633 Thailand 424 485 1,310 2,014 3,336 3,684 4,312 4,636 Turkey 1,134 1,053 1,658 1,100 1,363 1,817 1,504 1,539 Uruguay 185 227 251 333 1,322 1,315 1,21 1 1,297 Venezue a 2,241 2,466 2,476 1,746 3,697 3,628 3,121 3,382 Offshore banking centers 25,943 24,063 47,343 5 1,506 26,991 27,736 31,485 28,848 Oil exporters 10,096 9,793 10,161 9,563 7,649 7,545 6,719 8,134 DRS reporters 7,86 7,705 6,919 4,902 5,147 4,656 4,416 5,718 DRS reporters 36,183 35.850 43.765 48,532 84,248 88,556 90,659 92,709 Not available. Note: This table shows the latest available data from each major creditor country. Recent data are not avai able for Japan. See country classifications a the end of this statistical appendix. a. Consolidated claims of banks and their worldwide operations. b. Most of these countries are also included in the indebted country groups. c, Partly consoiidated aggregate claims of banks and their worldwide operations, Source: Banque de France, Bulletin Trmestriel: Deutsche Bundesbank, Zohlongsbilanzstatistik; Banca d'Italia, Bolletino Economico; De Nederiandsche Bank, Quarterly Bulletin; Banque Nationale Suisse, Les Banques Suisses; Bank of England, Staosticol Abstroct, Port l; Federal Financial Institutions Examination Council, U.S. Country Exposure Lending Survey. August 1996 Statistical appendix -A:,i'[ Maturities of bank claims on developing countries US$ millions 1995Q4 More then Less than I yer and less More than Estimoted Short-term Country group or country 1994 Totol Iyeor than 2 years 2 years Unollocoted short-term (% of total) All developing countries 643,351 898,139 413,272 50,553 239,774 194,540 371,891 41 East Asia and Pacific 196,488 260,773 162,274 14,455 64,986 19,058 149,936 57 Europeand CentralAsia 145,746 175,551 81,105 15,71 1 65,818 12,917 69,01 1 39 LatinAmericaandtheCaribbean 198,267 213,558 1i12,057 12,348 71,880 17,273 104,180 49 Middle East and North Africa 54,021 52,245 25,821 4,666 20,924 834 20,789 40 South Asia 8,994 22,074 11,993 1,343 7,394 1,344 10,506 48 Sub-Saharan Africa 29,835 173,938 20,022 2,030 8,772 1 43,1 14 17,469 1 0 Severely indebted middle-income 213,455 226,688 113,631 13,393 81,304 18,360 103,886 46 Algeria 14,364 13,247 5,191 ,638 6,232 186 3,261 25 Angola 1,568 1,695 863 161 526 145 704 42 Argentina 34,343 39,181 22,417 2,218 11,145 3,401 20,730 53 Bolivia 356 399 280 5 50 64 279 70 Brazil 47,588 57,391 32,1 15 3,416 16,187 5,673 30,693 53 Bulgaria 3,010 3,007 563 262 1,655 527 340 11 Gabon 733 640 308 75 245 12 229 36 Ecuador 3,050 2,780 1,398 77 1,159 146 1,207 43 Jamaica 657 644 387 50 164 43 357 55 Jordan 1,081 1,138 726 57 215 140 661 58 Mexico 61,731 57,331 26,019 3,403 22,859 5,050 23,933 42 Panama 26,051 27,723 13,077 1,407 11,852 1,387 11,777 42 Peru 3,064 5,617 4,306 194 1,096 21 4,257 76 Poland 6,546 6,870 2,004 291 3,188 1,387 1,684 25 Syrian Arab Republic 467 471 304 3 153 11 296 63 Severely indebted low-income 25,125 25,500 12,311 1,830 10,137 1,222 9,580 38 Moderately indebted low-income 22,605 25,800 14,679 1,691 8,255 1,175 12,786 50 Moderately indebted middle-income 179,452 209,388 99,495 18,986 78,858 12,049 83,264 40 Selected countriesa 353,271 417,265 233,478 26,505 126,744 30,538 210,627 50 Chile 12,219 13,616 7,446 1,060 4,856 254 6,661 49 China 41,005 48,399 23,060 3,601 17,342 4,396 20,206 42 Colombia 9,980 10,940 5,810 756 4,053 321 5,046 46 C6te d'lvoire 2,034 1,993 1,751 45 160 37 1,690 85 Egypt 3,194 3,487 2,463 343 651 30 2,1 16 61 Hungary 8,693 9,104 3,150 754 3,841 1,359 2,178 24 India 14,202 15,446 7,714 1,094 5,593 1,045 6,442 42 Indonesia 34,198 44,843 27,900 3,157 12,332 1,454 24,560 55 Korea, Rep, of 6,459 77,392 54,130 2,553 12,058 8,651 51,240 66 Malaysia 13,460 16,759 7,882 1 , 147 5,71 1 2,019 7,043 42 Morocco 4,725 4,654 2,109 340 2,204 1 1,748 38 N geria 3,276 2,826 1,190 363 1,181 92 816 29 Philippines 6,498 8,325 4,070 345 3,441 469 3,831 46 Thailand 43,386 62,994 43,817 3,536 13,600 2,041 41,769 66 Turkey 15,472 18,623 8,965 1,961 6,279 1,418 7,340 39 Uruguay 3,491 3,748 2,457 71 1,159 61 2,405 64 Venezuela 13,100 1 1,940 2,920 749 6,555 1,716 2,495 21 Offshore banking centers 599,962 658,672 530,634 16,232 82,092 29,714 515,701 78 Oil exporters 1 25,383 1 29,669 57,673 11,340 57,025 3,63 1 46,338 36 DRS reporters 97,124 102,506 40,239 10,684 48,292 3,291 29,795 29 DRS reporters 563,091 662,234 366,600 40,762 206,909 47,963 332,275 50 Note: See country classificatons at the end of this statistical appendix. a. Most of these counties are also included in the indebted country groups. Source. Bank for I nternat onal Settlements, The Mcturity and Sectorol Distnbution of Intermcbonci Bonk Lending. M Financial Flows and the Developing Counties 0 ~~~~~~~~~~~~~~~~~~~~~~~Statistical appni T FL F Funds raised on intern-ational capital markets UJS$ millions Country group or country /992 1993 1994 / 995 1994Q4 i995Q 995Q2 I 995Q3 i 995Q4 1996Q1 All developing countries 41,562 78,257 76,144 96,177 20,072 6,920 22,832 30,760 25,665 39,258 Bonds 22,335 57,020 49,210 53,472 14,361 5,461 12,794 19,097 16,121 32,806 International 14,362 40,265 37,068 34,827 11,271 3,797 9,251 11,773 10,006 26,533 Foreign 7,974 1 6,756 12,142 18,646 3,090 1,664 3,543 7,324 6,i IS 6,273 Loans 19,226 21I,237 26,935 42,705 5,71 1 11,459 I10,038 11,663 9,544 6,452 Intemnational 18,981 21I 040 26,840 42,705 5,71 I Ii,459 10,038 11,663 9,544 6,424 Foreign 245 197 95 ..28 East Asia and Pac fic 1 5,897 26,612 35,098 39,985 6,597 8,153 7,440 13,428 10,964 10,161 Europe and Central Asia 9,642 20,264 13,632 19,008 4,08 4,718 6,097 4,079 4,1 15 16,577 Lat n America and the Car,bbean 9,518 27,338 20,438 24,788 7,196 995 6,1 89 8,985 8,619 10,995 Middle East and North Afr ca 3,070 337 1,102 1,51 1 1 8 272 284 268 202 758 Soutn Asia 20 1 567 1,656 2,954 3 18 1,I053 488 1,063 350 413 Sub-Saharan Africa 1,273 I102 1,864 3,674 1,007 906 948 I1,2 14 606 8 I I Severely indebted middle-income 8,247 22,686 I18,366 21,507 6,049 700 6,151 8,288 6,369 9,408 Algeria.,.... Angola 325 1 2 124 124 3 10 Argentina 1,529 6,473 5,716 6,983 2,572 405 1,512 2,1I90 2,876 3,443 Bol vas 10 ., Brazil 3,010 6,449 4,01 [ 6,635 2,1 28 1 58 3,1 1 4 1,437 1,927 2,325 Bulgara -.. . .. Ecuador ,. . . 10 ... . 10 Gabon.. . , . ... Jamaica.. . ,,. Jordan 50 .. . , 50 Mexco 3,374 9,751I 8,526 6,957 ,346 137 1,077 4,187 I.556 3,330 Panama 15O ..5.IS Peru ... 100 50 .. , . 50 Poland 9 ..3 549 3 .. 299 250 Syrian Ar-an Republic . .. .. Severely indebted low-income 116 72 557 439 .. I 235 34 160 250 Moderately indebted low-income 316 657 1,674 3,012 318 1,053 488 1,063 408 413 Moderately indebted middle-income 13,106 24,942 18,835 26.046 6,171 3,483 7,1 33 6,768 8,662 19,861 Selected countries' 26,863 51,999 49,917 60,344 10,257 9,482 1 1,898 22,051 16,91I4 J 6,536 Chile 350 775 80 1,448 .. 245 377 451 375 1,132 China 4,043 6,756 8,097 6,258 1,378 i 582 553 2,265 1,8S8 1,200 Coiombia 621 1, 172 2,082 647 50 110 393 1,~529 745 C6te dilvoi're . .. .. Egypt ....l 58 -.. -.. 58 Hungary 1,446 5,071 2,541 3,771 1,099 252 1,788 1,036 695 145 India 201 475 ,461 2,263 168 644 303 966 350 413 Indonesia 2,641 3,726 6,199 7,588 1144 1,440 2,135 1,895 2.1 19 2,401 Korea, Rep. of 5,204 7,719 7,972 I14,533 1,413 3,296 2,908 4,402 3,927 4,188 Malaysia I 271 I 61 I 3,526 3,205 400 250 2,252 703 300 Morocco 60 . . 25 .. 25 Nigeria . .. .. Philippines .. 1,250 1,164 1,272 364 340 333 599 147 Thailand 2,718 5,550 7,9 I 0 6,634 1,897 I1,836 1,254 2,246 1,298 I 925 Turkey 4,580 5,763 851 3,929 . . 805 1,623 1,501 590 Uruguay 120 140 203 206 103 .. 206 Venezuela 1,035 2,931 400 346 400 ... . 346 20 Offshore banking centers 2,058 9,476 8,574 4,939 2,852 851 1,582 I, 153 I 354 I1,622 Oil exporters 4,445 3,503 2,8 17 3,949 788 168 715 1,~420 1,646 650 DRS reporters 1,460 3,157 1,498 1,566 516 ,. 140 1,080 346 405 OECD countries 392,920 SIOSSO5 498,211 723,203 139,944 153,078 1 95,135 176,669 198,321 184,190 Muitilatera, institutions 20,874 20,71 I 12,373 17,674 4,569 2.257 5,291I 5,870 4,257 5,802 Other 1,961 3,037 2,353 4,257 601 812 1,403 1,789 253 301 Totalb 458,275 619,986 598,005 844,596 167,961 173,106 225,130 214,952 231.409 231,481 Not ass able. Note- See country classifications at the end of this statistical appendix. a. Moss of these countries are also included in the indelbted country groups. o. Incluoes all developing countries, offshore banking centers, OECD countries, mu t ateral institutions, and the category "other." Source; OECD, Fononciol Statistics Monthly, Port 1. Au,gust 1996 Statistical appendix ,P , Secondary market debt (bid) prices Percentage of face value Country group or country l993Q4 1994Q1 l994Q2 1994Q3 1994Q4 1995Ql l 995Q2 1995Q3 1995Q4 1996Ql l996Q2 Severely indebted middle-income Angola lB8 20 20 1 8 1 5 1 7 1 6 1 9 IS8 Argentinaa 69 52 50 5 I 4 1 40 48 47 56 52 55 Brazili' 53 . 4 1 4-4 40 3 6 45 48 52 5 I 53 Bulgaria 4 1 35 25 45 45 42 50 5 I 53 50 52 Cameroon IS5 23 1 6 1 7 1 0 1 3 1 4 1 6 1 6 Congo 9 3 1 3 1 3 I1 1 3 1 2 IS 1 6 Ecuador' 52 40 40 33 29 27 48 49 50 54 36 Jamaica 76 85 83 83 83 82 76 74 Jordan 52 48 47 48 42 35 39 44 47 54 lB Morocco SI 64 72 72 66 58 58 63 67 69 24 Panama 61 54 49 59 53 .. 53 59 .. 45 48 Remu 68 46 48 60 56 SI 61 68 71 Poland 50 32 35 37 33 31 43 43 47 49 50 Uruguay.. .......... Other selected countries Albania 5 10 12 16 16 16 18 21 22 14 13 Algeria 64 48 43 46 30 28 28 ... 46 18 Chile 95 94 95 95 95 . . . Costa Rica' 82 69 66 66 66 -. 51 52 54 60 59 C6te d'lvoire 18 20 18 19 18 IS IS 16 16 20 19 Egypt 46 46 46 47 48 48 48 48 48 49 16 Honduras 31 34 39 36 36 .. 27 ... . 35 Mexico' 84 69 63 66 53 47 60 60 64 64 66 Nicaragua 10 9 8 8 6 ..S. 8 9 7 Nigeria 60 42 40 39 39 37 43 44 48 52 53 Philippines' 82 66 63 65 59 59 73 74 74 79 80 Russian Federationg . .. . 39 28 22 32 33 34 34 42 Senegal 38 34 31 36 36 .. 35 ... 16 IS Venezuela' 74 49 49 49 45 43 50 5I 59 56 60 -,Not available. a. Guaranteed Ref nancing Agreement (GRA). Prices after March 1993 refer to par bonds offered under the Brady in tiative. b. Muiti-Year Deposit Facility Agreement (MYDFA). Prices after April I 994 refer to par bonds offered under the Brady initiative. c. Multi-Year Refinancing Agreement (MYRA), d. Prices refer to par bonds offered under the Brady initiative. e. Prices refer to Series A par bonds offered under the Brady initiative. f. Public sector restructured debt, including Central Bans of the Phrllipines. Prices refer to restructured loans offered under the Brady initiative. g.These are non-performing loans of the Russian Vnesheconombank. Source: Salomon Brothers; Euroweek; Emerging Market Debt Report; international Financing Review; and World Bank data. MEFnancial Flows and thzeDevel aping Countries Statistical appendix Fa;'Emerging stock markets Morket copitalizotion Value of stock traded Price-eornangs ratio (US$ miliions) (US$ millions) (percent) Economy 1995Q4 1996QI 1996Q2 1995Q4 1996QI 1996Q2 1995Q4 1996QI 1996Q2 Argentina 37,783 37,480 44,108 813 1,158 1,183 14.2 16.7 20.4 Braz 1 147,636 161,506 191,287 17,099 21,700 26,584 7.7 21.4 30.1 Chile 72,928 69,129 72,713 3,184 2,685 2,146 19.1 15.9 16.3 China 42,055 43,402 72,473 10,619 4,777 40,637 .. 0 12.7 Colombia 17,893 14,579 14,981 298 272 366 .. 11.7 9.5 Greece 17,060 18,154 23,717 2,618 2,065 1,498 12.3 10.8 9.4 Hungary 2,399 3,556 4,239 82 309 334 10.9 28.1 35.5 India 127,199 154,392 150,671 3,538 4,309 8,061 14.2 14.7 16.8 Indonesia 66,585 74,953 79,216 3,538 6,386 7,539 19.8 26.7 22.4 Jamaica 22 .. .. .. ,, ,, . 0 0 Jordan 4,670 4,295 4,209 84 63 64 18.5 14.6 12.9 Korea, Rep. of 181,955 178,695 164,940 42,128 35,475 62,913 19.8 20.7 14.9 Malaysiaa 222,729 259.292 271,290 6,451 43,387 42,137 25.1 28.9 27.7 Mexico 90,694 102,735 110,700 8,483 12,81 1 13,617 28.4 16.8 10 Nigeria 2,033 2.240 2,665 5 6 IS 12.5 0 0 Pakistan 9.286 9,792 10,608 765 1,813 1,738 IS 14.2 I5 Peru 11,795 12,385 13,653 1,665 1,240 844 14.5 15.6 17.4 Ph lippines 58,859 67,270 79,970 3,861 5,282 7,308 19.1 20.4 35.6 Poland 4,564 6,723 8,014 595 1,627 1,374 6.8 8.5 11.4 Portugal 18,362 18,842 20,653 910 1,584 1,374 14.8 IS.1 1,537.0 SouthAfrica 280,526 278,435 270,903 5,207 7,121 1,409 18.8 18.7 18.9 SriLanka 1,998 2,106 1,777 37 SI 21 8.1 13.3 11.3 Taiwan (China) 187,206 185,541 232,878 78,909 58,704 167, I 71 21.3 21.6 26.9 Turkey 20,772 31,225 28,967 1 1,920 1 1,565 8,050 8.4 12 9.8 Venezuela 3,655 3,771 5,343 177 203 242 9.3 28.9 33.7 Zimbabwe 2,038 2,361 2,547 27 44 47 7.3 11.6 1 3 Not available. a. Data for Malaysian-incorportated companies only. Source: International Finance Corporation, Emerging Stock Morkets Foctbook. August 1996 5 Statistical appendix T A 3[ Foreign direct investment flows US$ millions 1986 1987 1988 1989 1990 991 1992 1993 1994a All developing countries 9,899.3 14,107.7 20,253.4 23,933.8 25,009.0 34,978.0 46,610.0 68,261.0 80,120.0 East Asia and Pacific 3,550.4 4,508.8 7,610.9 9,095.5 10,968.0 13,890.0 21,668.0 37,872.0 43,037.0 Europe and Central Asia 605.9 836.4 1,338.8 1,744.0 2,102.0 4,390.0 6,270.0 8,337.0 8,362.0 Latin America and the Caribbean 3,556.4 5,788.4 7,948.5 8,137.7 7,842.0 12,602.0 14,469.0 1 5,70 1.0 20,81 .0 Middle East and North Africa 1,241.6 1,160.0 1,882.8 1,965.7 2,757.0 1,825.0 2,081.0 3,757.0 3,681.0 South Asia 261.7 409.6 326.3 486.9 464.0 456.0 624.0 841.0 1,242.0 Sub-Saharan Africa 683.3 1,404.5 1,146.1 2,504.0 876.0 1,8 15.0 1,498.0 1,753.0 2,987.0 Eastern Europe 16.0 12.0 15.0 268.3 300.1 2,449.0 4,078.8 4.140.0 Severely indebted middle-income' 2,907.6 4,991.3 7,178.4 5,808.6 5,485.0 9,759.0 12,565.0 14,285.0 18,122.0 Algera 5.3 3.7 13.0 12.1 0.3 12.0 12.0 IS.0 18.0 Angola 234.0 119.0 131.0 200.0 -335.0 665.0 288.0 302.0 350.0 Argentina 574.0 -19.0 1,147.0 1,028.0 1,836.0 2,439.0 4,179.0 6,305.0 1,200.0 Bolivia 10.0 38.1 -10.1 -24.4 11.0 25.0 35.0 25.0 20.0 Brazil 320.0 1,225.0 2,969.0 1,267.0 989.0 1,103.0 2,061.0 1,292.0 3,072.0 Bulgaria 0.0 0.0 0.0 0.0 4.0 56.0 42.0 55.0 105.0 Ecuador 70.0 75.0 80.0 80.0 126.0 160.0 178.0 469.0 531.0 Gabon 110.3 89.8 132.5 -30.5 74.0 -55.0 127.0 -114.0 -103.0 Jamaica -4.6 53.4 -12.0 57.1 138.0 133.0 142.0 78.0 117.0 Jordan 22.8 39.5 23.7 -1.3 38.0 -12.0 41.0 -34.0 3.0 Mexico 1,523.0 3,246.0 2,594.0 3,037.0 2,549.0 4,742.0 4,393.0 4,389.0 7,978.0 Panama -62.2 56.8 51.7 36.6 -147.0 138.0 173.0 658.0 549.0 Peru 22.0 32.0 26.0 59.0 41.0 -7.0 145.0 371.0 2,326.0 Poland 16.0 12.0 15.0 1 1.0 89.0 291.0 678.0 1,715.0 1,875.0 Syrian Arab Republic 65.0 7.0 121.0 74.0 71.0 62.0 67.0 70.0 76.0 Severely indebted low-income 275.7 1,106.3 658.1 2,172.8 840.0 1,604.0 1,713.0 2,718.0 2,883.0 Moderately indebted low-income 1,477.1 1,280.3 1,484.1 1,754.0 1,151.0 709.0 1,021.0 1,324.0 2,499.0 Moderately indebted middle-income 2,028.3 2,447.4 3,657.9 5,296.9 5,389.0 9,124.0 9,566.0 10,512.0 1 1,543.0 Other selected countries' 7,478.6 10,166.2 12,505.4 18,032.5 17,049.9 24,649.4 30,726.0 49,223.4 62,539.0 Chile 116.0 230.0 141.0 1,289.0 590.0 523.0 699.0 841.0 1,795.0 China 1,875.0 2,314.0 3,194.0 3,393.0 3,487.0 4,366.0 1 1,156.0 27,515.0 33,787.0 Colombia 674.0 319.0 203.0 576.0 500.0 457.0 790.0 850.0 950.0 C6ted' Ivoire 70.7 87.5 51.7 18.5 48.0 16.0 231.0 40.0 17.0 Egypt 1,217.4 947.7 1,190.0 1,250.2 734.0 253.0 459.0 493.0 1,256.0 Hungary 0.0 0.0 0.0 0.0 0.0 1,462.0 1,479.0 2,349.0 1,144.0 India 118.0 212.0 91.0 252.0 162.0 141.0 151.0 273.0 620.0 Indonesia 258.0 385.0 576.0 682.0 1,093.0 1,482.0 777.0 2,004.0 2,109.0 Korea 435.0 601.0 871.0 758.0 788.0 1,180.0 727.0 588.0 809.0 Malaysia 488.9 422.7 719.4 1,667.9 2,333.0 3,998.0 5,183.0 5,006.0 4,348.0 Morocco 0.5 59.6 84.5 167.1 165.0 317.0 422.0 491.0 601.0 Nigeria 166.8 602.7 376.9 1,882.3 588.0 712.0 897.0 1,345.0 1,959.0 Philippines 127.0 307.0 936.0 563.0 530.0 544.0 228.0 763.0 1,000.0 Thailand 262.5 35 1.9 1,105.4 1,775.5 2,444.0 2,014.0 2, 116.0 1,726.0 640.0 Turkey 125.0 1 15.0 354.0 663.0 684.0 810.0 844.0 636.0 608.0 Uruguay 37.0 50.0 46.8 0.0 0.0 0.0 1.0 102.0 170.0 Venezuela 16.0 21.0 89.0 213.0 451.0 1,916.0 629.0 372.0 764.0 Not available. Note: See country classifications a the end of this statistcal appendix. Table includes data for 154 developing countries of which 37 report to the Word Bank Debtor Reporting System. a. Estimate. b. Aggregate total includes non-DRS economies, c. These countries are also included in the indebted country groups. Source: World Bank Debtor Reporting System; IMF data. FinancialFlows and theDeveloping Countries Statistical appendix Country groups East Asia and Pacific Former Yugoslavia* Colomb a* Iraq.. Ethiop a* American Samoa Georgia* Costa Rica* Jordan* Gabon* Cambodia* Gibraltar** Cuba** Llbya** Gambia, The* China* Greece** Domin ca* Morocco* Ghana* Fiji* Hungary* Dominican Republic* Oman* Guinea* Guam Isle of Man Ecuador* Saud Arabia** Guinea-Bissau* Indonesia* Kazakstan* El Salvador* Syrian Arab Republic* Kenya* Kiribat** Kyrgyz Republ c* French Guiana Tun sia* Lesotho* Korea, D.P.R. of** Latvia* Grenada* Yemen* Madagascar* Korea, Rep. of' Lithuania* Guadeloupe South Asia Malawi* Lao P.D.R.* Macedon a FYR* Guatemala* Mali* Maaysia* Malta* Guyana* Afghanistan** Mauritania* Marshall Islands Moldova* Haiti* Bangladesh* Mauritius' Micronesia Poland* Honduras* Bhutan* Mayotte Mongol a* Portugal* JamaicaI lndia* Mozambique' Myanmar* Romania Martinique Maldives* Namiea* New Caledon a** Russian Federation* Mexico* Nepal' Niger* Papua New Guinea* S ovak Republic* Nicaragua* Pakistan* N gena* Phi ippines* Slovenia* Paraguay* Sri Lanka* Reunion Solomon Islands* Tajikistan* Peru* Sub-Saharan Africa Rwanda* Thailand* Turkey' Puerto Rico Angola* Sao Tom6 and Pr ncipe* Tonga* Turkmenistan St. Kitts and Nevis* Benin* Senegal* Vietnam* Ukraine* St. Luca* Botswana* Seychelles* Western Samoa* Uzbekstan* St. Vincent* Burkina Faso* Sierra Leone* Suriname** Burund * Somalia Europe and Latin America and Tr nidad and Tobago* Cameroon* South Africa** Central Asia the Caribbean Uruguay* Cape Verde* Sudan' Albania* Antigua and Barbuda** Venezuela* Central African Republic* Swaziland* Azerbaijan* Argentina* Chad Tanzania* Belarus* Aruba Middle East Comoros* Togo* Bulgaria' Belize* and North Africa Congos* Uganda* Croatia* Boliviae Algeria* Cote d'lvoire* Zaire* Czech Republ c* Braz 1* Egypt, Arab Rep. of` Djbourti* Zambiae Estonia* Chile* Iran, Islamic Rep. of' Equatorial Guinea Zimbabwe Severely indebted Syrian Arab Republic Liberia Zambia Moderately indebted middle-income , Madagascar middle-income countriesab Severely Indebted low- Mali Moderately indebted countriesa Algeria income countriesa Mauritan a low-income countries' Cape Verde Angola Afghanistan** Mozambique Albania Chile Argent na Burundi Myanmar Bangladesh Co ombia Boliv a Cambod a Nicaragua Benin Dominican Republic Brazi Cameroon Niger Chad Greece** Bulgaria Central African Republic Nigeria Comoros Hungary Cuba** Congo Rwanda Egypt, Arab Rep. of Indones a Ecuador Cote d'lvoire Sao Tome and Principe Gambia, The Morocco Gabon Equatorial Guinea Sierra Leone Haiti Papua New Guinea Iraq** Ethiopia Somalia India Philippines Jamaica Ghana Sudan Lao P.D.R. Russian Federation Jordan Guinea Tanzania Maawi Tun sia Mexico Guinea-Bissau Uganda Nepal Turkey Panama Guyana Vietnam Pakistan Venezuela Peru Honduras Yemen Senegal Western Samoa Poland Kenya Zaire Zimbabwe Offshore banking Cayman Islands Singapore Brunei Nigena* centers' Hong Kong Vanuatu* Congo* Oman* Bahamas Lebanon' Former Sov et Union* Qatar Bahrain** L beria* Oil exporters Gabon* Saudi Arabia** Barbados* Macao Algeria* Iran, Is amic Rep. of*> Trinidad and Tobago* Bermuda Netherlands Antilles Angola* Iraq** United Arab Emirates Panama* Bahrain** L bya** Venezuela* DRS reporter. ** Non-DRS economy. The remaining countres nclude selected hgh- ncome and non-OECD middle-income countres. The Debtor Reporting System (DRS), set up in 1951 to monitor statistics on the external debt of develop ng countries, s mainta ned by the staff of the International F nance Div s on of the World Bank's International Economics Department. The Wor d Bank is the so e repository for these statistics on a loan-by-loan basis Note. Country group compos tion has been modified to reflect the annual updating of GNP per capita and related debt indicators. a. A I countres in the group are DRS reporters, except those for wh ch it is otherw se indicated. b. Indebtedness criteria are consistent with those appearng in the World Debt Tobles 1996. c. Offshore banking centers are not nc uded in any other country group except for oil exporters. 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PO Box 7247-8619 Philadelphia, PA 19170-8619 USA - II I_II I II I Emerging Stock Markets Factbook 1996 ------------------------~~----------------------- Ee Yes, send me the following publications This tenth edition of the survey of emerging markets by the * Emerging Stock Markets Factbook 1996 International Finance Corporation (IFC) profiles more than 60 US$100/Order No. 13649 markets worldwide (IFC Index Markets), interpreting their basic * IFC's Experience in Promoting Emerging Market Investment economic and stock market characteristics. Many tables and charts Funds, 1977-1995 US$1095/Order No. 13676 _______ Leasing in Emerging Markets draw on data collected from more than 100 stock exchanges sur- US$10.9s5/Order No. 13675 veyed in the IFC's Global Survey of Stock Exchanges. U The sections devoted to the 27 constituent stock markets of the * z Enclosed is my check for US$ . . drawn on a US bank and IFC's Global and Investable Indexes provide historical data on the payable to the World Bank in US dollars. For payment in local currency, l IFC's composite, regional, country, and industry indexes; summaries please ask for the distributor in your area. of significant political and economic developments in each con- Charge my: stituent market over the past year; and extensive data on other emerging markets as well as developed markets. Appendixes include : VISA MasterCard American Express a directory of emerging stock exchanges around the world, sum- maries of investment restrictions and tax issues facing foreign investors, and information on the IFC's Emerging Markets Database. : Credit Card Account Number Expiration Date 1996 Stock no. 13649 (ISBN 0-8213-3649-5) Signature US$100 : Name: Company: IFC's Experience in Promoting Address: Emerging Market Investment Funds, - 1977-1995 C City/State/Postal Code:__ Laurence Carterl Country: This report, the second in the IFC Lessons of Experience series. describes the IFC's experience with various funds in emerging QLI Bill my organization. Institutional customers in the US only. Please descries th IFC' expeiencewith vriousfundsin emrginginclude a purchase order. markets and the effects of these financial instruments on develop- ment. The instruments include country funds, debt equity funds, Name: index funds, venture capital funds, private equity funds, local mutual funds, and private pension funds. C company: Address: 1996 Stock no. 13676 (ISBN 0-8213-3676-2) US$10.95' C city/State/Zip Code: Leasing in Emerging Markets Note: If you are paying by check or credit card, shipping and handling Laurence Carter charges are US$5 per order. For air mall delivery outside North America add US$8 for one item plus US$6 for each additional item. Prices may vary, b y country and are subject to change without notice. a This review of the IFC's 20 years of leasing experience in develop- b 1229 ' ing countries assesses the developmental impact of leasing. The ---------------------------------------------- IFC has invested in leasing companies in more than half the developing countries that have a leasing industry today. This is IFC Lessons of Experience Paper 3. 1996 Stock no. 13675 (ISBN 0-8213-3675-4) Cut out form above and mail to: US$10.95 The World Bank PO Box 7247-8619 To have your order shipped faster, call 202-473-1155 to charge by credit Philadelphia, PA 19170-8619 -ard, or send this completed order coupon by facsimile to 202-522-2627 USA _ n ==~~~~~~~~~~~~~~~~~~~~~. x _ Of Related Interest Trends in Developing Economies 1996 ~' Yes, send me the following publications ld1 Trends in Developing Economies 1996 This seventh annual collection of profiles, text, and summary US$35.95/Order No. 13572 statistical tables describes the recent economic performance of l E 117 developing economies through December 1995. The country 1996 Global Economic rospects and the Developing Countries profiles describe each country's economic features, current socioeconomic issues, recent political developments, and l Enclosed is my check for US$ drawn on a US bank and medium-term prospects and summarize national development payable to the World Bank in US dollars. For payment in local currency, strategies. please ask for the distributor in your area. In addition to describing current events in and the recent past of each economy, the text places the events in context by high- lighting the distinguishing characteristics of an economy, its ___ VISA MasterCard American Express problems and prospects, and the principal elements of its develop-. ment strategy. Several themes recur from country to country: government initiatives in progress or under consideration, eco- Credit Card Account Number Expiration Date nomic and social factors affecting development, and external finance and debt issues. gnu ffi ~~~~~~Signature September 1996 Name: Stock no. 13572 (ISBN 0-8213-3572-3) US$35.95 Company: Address: Global Economic Prospects and the Developing Countries 1996 City/State/Postal Code: Country: _ This sixth annual study focuses on the effects of globalization on developing countries and the growing divide between fast- and I Bill my organization. Institutional customers in the US only. Please slow-integrating economies. It describes current trends in inte- include a purchase order. gration and answers key questions on trade and on commodity- reliant economies. The pace of global economic integration continues to accelerate Company: dramatically. In the ten years from 1985 to 1994, the ratio of world Address: trade to GDP rose three times faster than during the previous decade. During this same 10-year period, foreign direct investment (FDI) doubled as a share of global GDP, while the fraction of FDI City/State/Zip Code: _ going to developing countries rose to more than one-third. reveal sr d e Note: If you are paying by check or credit card, shipping and handling A closer look at the changes, however, reveals sharp disparties charges are US$5 per order. For air mail delivery outside North America' in integration and unevenness in distribution of trade and invest- add US$8 for one item plus US$6 for each additional item. Prices may vary, ment flows. Though developing countries in the aggregate kept by country and are subject to change without notice. pace with the world rate of trade integration, the ratio of trade to i 1230 GDP fell in some 44 of 93 developing countries in the last 10 years. There were similar disparities in the distribution of FDI. The report projects continued rapid acceleration of integration over the next decade, with continued sharp import increases in developing countries. Countries that continue to reform their economies and expand their participation in the world economy Cut out form above and mail to: will be in a position to take advantage of the resulting opportuni- PO Box 7247-861 ties; those that do not, risk falling further behind. Philadelphia, PA 19170-8619 USA 1996 Stock no. 13285 ISBN (0-8213-3285-6) To have your order shipped faster, call 202-473-1155 to charge by credit US$12.95 card, or send this completed order coupon by facsimile to 202-522-2627. :MT- "I_ I I I I RIA. VI M I_ III I World Bank quarterlies Commodity Markets and the | []1 Yes, please enter my subscription for the DevelopingCountries World Bank quarterlies, as indicated Not just the facts, unbiased analyses. The World Bank isn't in the business of selling commodities. As an international lender putting _ Commodity Markets and the Developing Countries millions of dollars at risk every day, we demand objectivity regard- US$150/year ing the commodities markets that play such an important role in F Financial Flowvs and the Developing Countries a developing countries. That is why you get unbiased forecasts that US$150/year are based on our own research. Four times a year World Bank commodity experts examine pro- ' Enclosed is my check for US$ drawn on a US bank and duction, consumption, and factors from climate to exchange rates payable to the World Bank in US dollars. For payment in local currency, to give you the intelligence you need to make better decisions. please ask for the distributor in your area. Only Commodity Markets covers such a wide range of the world's commodities-28 in all-with substantive yet succinct l Charge my: reports on: * VISA MasterCard American Express * Foods: bananas, beef, citrus, shrimp, sugar; cocoa, coffee, tea; coconut oil, palm oil, soybean oil; maize, rice, wheat * Agricultural raw materials: cotton, jute, rubber, timber Credit Card Account Number Expiration Date * Metals and minerals: aluminum, copper, gold, iron ore, and steel * Energy resources: coal, petroleum Signature * Fertilizers: potassium chloride, TSP, urea Name: IssuedFebruary, May, August, andNovember. Approximately 40 pages/lISSN 1020-0967 Address:__ Financial Flows and the C City/State/Postal Code:__ Developing Countries '' The most comprehensive source on the subject is also the only Country: source that brings you the dependable data and authoritative anal- f B J C]Bill my organization. Institutional customers in the US only. Please yses used by senior executives at the World Bank. include a purchase order. Four times a year World Bank experts analyze the data from more than 140 developing countries, including exclusive informa- Name: tion reported by members under our Debtor Reporting System. Only Financial Flou's covers the entire developing world, not Company: just the top emerging markets. It's organized in seven sections for Address: easy reference: * International lending and capital markets * Equity portfolio and foreign direct investment City/State/Zip Code: * Secondary markets for developing-country debt Country: * Bilateral and multilateral official capital flows * Debt relief update Note: If you are paying by check or credit card, shipping and handling * Special financial brief charges are US$5 per order. For air mail delivery outside North America Financial Flows gives you a wealth of statistical information as | add US$8 for one item plus US$6 for each additional item. Prices may vary FinacialFlow givs yo a walthof satisicalinfomatin a by country and are subject to change without notice. ' well. A statistical appendix includes tables with invaluable time- b FQc6 t series data on external debt, foreign direct investment, commercial L - - - - ----------------------------------------- - bank claims on developing countries, secondary market price of developing-country debt, funds and loans raised on international capital markets, and more. Issued February, May, August, and November. Cut out form above and mail to: Approximately 40 pages/ISSN 1020-0975 The World Bank PO Box 7247-7956 ro have your order shipped faster, call 201-476-2192 to charge by credit Philadelphia, PA 19170-7956 .ard, or send this completed order coupon by facsimile to 201-476-2197 USA Visit the World Bank's publications catalog on the World Wide Web: http://www.worldbank.org FINANCIAL FLOWS AND THE DEVELOPING COUNTRIES A WORLD BANK QUARTERLY Financial Flows and the Developing Countries is produced by the International Finance Division of the International Economics Department of the World Bank. For information about the contents, call Sheilah King-Watson, 202-473-3730, or fax 202-522-3277. The opinions expressed are those of the authors and should not be attributed in any manner to the World Bank, to its Board of Executive Directors, or to the countries they represent. It is published quarterly in February, May, August, and November. The annual subscription rate is $150.00. Send subscription orders to World Bank Publications, Box 7247-7956, Philadelphia, PA 19170- 7956, USA, telephone 201476-2192. © 1996 The International Bank for Reconstruction and Development/The World Bank 1818 H Street, NW, Washington, DC 20433, USA All rights reserved Manufactured in the United States of America Vol. 3, no. 4 ISSN 1020-0975 SeCturaL Library, ISBN 0-821I-3721-1 N 145 1) EJ Printed on recycled paper