GulfBase Live Support
24/07/2014 12:54 AST
Driven by accelerating growth in capital raising activities over the next one-and-a-half decades, emerging nation capital markets are expected to capture a more proportionate share of the global capital market universe relative to their economies, closing the gap with their developed peers, according to the Credit Suisse Research Institute’s Emerging Capital Markets: The Road to 2030 report.
Despite rapid growth in capital-raising over the past two decades, emerging country capital markets remain underdeveloped relative to the size of their economies. With a 39 per cent share of global output – or 51 per cent based on purchasing power parity, the 20 emerging nations currently only represent less than half of their fair share of the global capital market universe - accounting for only 22 per cent of global equity market capitalization, and a 14 per cent of the global corporate and sovereign bond markets. The Credit Suisse Research Institute, however, forecasts that by 2030, Emerging Market share of global equity market capitalization will increase to 39 per cent, while for corporate bonds and sovereign bonds to 36 per cent and 27 per cent respectively, around double their current market share.
“The disparity between developed and emerging nations in the global capital market universe will close by 2030. This should be driven by a disproportionately large contribution from emerging market equity and corporate bond supply and demand driven by growth in domestic mutual, pension and insurance funds, given the relatively high savings ratios prevalent among emerging economies. Moreover, the growing ability of Emerging Market corporates to access local currency capital markets shields them from the risk of exposure to unforeseen exchange-rate volatility,” says Stefano Natella, Global Head of Equity Research, Investment Banking, at Credit Suisse in New York.
Credit Suisse forecasts that the fastest 17-year nominal US dollar compound annual growth rate in market value of any asset class will be Emerging Market equities and corporate bonds at 13 per cent, followed by Emerging Market sovereign bonds at eight per cent, doubling the growth pace of their developed peers. Credit Suisse is forecasting growth in developed market equities, corporate and sovereign bonds to slow down at a pace of seven per cent, five per cent and three per cent, respectively. Consequently, the market value for emerging equities, corporate and sovereign bonds increases by $98 trillion, $47 trillion and $17 trillion, respectively, in nominal dollar terms between 2014 and 2030E, versus gains of $125 trillion, $52 trillion and $24 trillion, respectively, for these asset classes in the developed world.
“In this study, we extrapolate established historical patterns of growth in emerging and developed capital markets to assist in projecting their absolute and relative dimension and composition of market value by the year 2030. We find a strong relationship between the historical expansion of developed nation aggregate equity and corporate bond market value relative to GDP and gains in economic productivity. Thus, we used long-term projections of per capita GDP to make forecasts for both emerging and developed market equity and fixed income issuance over the 17 years to 2030,” explains Alexander Redman, Global Emerging Markets Equity Strategist, Investment Banking at Credit Suisse in London.
For more on this Click Here
CPI Financial
05/04/2018
Foreign investors bought $1.18 billion in Middle East and North African equities in March, especially Saudi ones amid the kingdom’s upgrade to emerging market status by FTSE Russell, according to a r
The National
05/04/2018
Buying activity in financials lifted the MSM30 Index to 4,794.61 points, up 0.41 per cent. The MSM Sharia Index closed at 676.52 points, down 0.08 per cent. Gulf Investment Services was the most acti
Times of Oman
05/04/2018
Traded value on the Dubai Financial Market tumbled on Wednesday as global stocks declined amid an intensifying US-China trade war. In Abu Dhabi, banking shares surged ahead of first quarter results s
Gulf News
04/04/2018
Driven by financial blue chips, the MSM30 Index continued its recovery to close at 4,775.27 points, a gain of 0.53 per cent. The MSM Sharia Index ended at 677.06 points, down 0.07 per cent. HSBC Bank
Times of Oman
04/04/2018
Emaar Properties shares extended losses for another session on Tuesday, to hit their lowest level in a year, as selling continued on the wider Dubai gauge. Emaar Properties fell to a low of Dh5.58, b
Gulf News