Liquidity in Equity Markets: Its Sources & Significance in Developing Economies
Liquid equity exchanges offer extensive benefits for investors and policymakers in developing markets. 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 in 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.