Liquidity in Equity Markets: Its Sources & Significance in Developing Economies

This MOBILIST research report focuses on the impor­tance of liquidity and practical considerations in building liquid public equity markets in a developing country for the benefit of not only investors but also the broader economy. Key questions addressed by the report include:

• What are the benefits of liquidity in developing countries, not only to investors but also to policymakers and the broader economy?

• How can both the demand and supply side of liquidity be bolstered in developing economies?

• What should be the key focus at the early-stage of capital market planning, as opposed to the policy emphasis at the mid- or late-stage of equity market development?

The report aims to address a variety of market actors – asset managers (including representatives of MDBs/DFIs), emerging and developed market policy­makers and regulators, issuers, intermediaries, and researchers – to consider:

• The key hurdles to creating genuinely liquid (equity) capital markets in developing economies; not only to investors but also to policymakers and the broader economy.

• How a well-orchestrated and multipronged approach, addressing both the supply (domestic savings industry, foreign capital flows) and the demand (ensuring a vibrant, well-regulated equity market with a steady flow of quality listings) side of liquidity, could overcome such hurdles.

Click here to download the Executive Summary of the report.