Back Matter

Back Matter

Author(s):
Carmen Reinhart, and Mohsin Khan
Published Date:
October 1995
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Portfolio Capital Flows to the Developing Country Members of APEC

Appendix Tables

Table A1.Capital Flows to APEC Developing Countries by Country1(In billions of U.S. dollars)
198219831984198519861987198819891990199119921993
APEC developing countries27.914.310.014.38.22.3-4.16.926.651.943.389.4
Asia17.815.811.017.310.70.63.25.013.029.823.657.6
NIEs5.53.72.72.3-3.0-8.5-6.6-10.0-5.05.17.38.7
Korea1.81.83.02.3-2.6-8.5-3.4-3.9-0.76.17.58.8
Singapore1.80.80.81.01.22.63.01.72.31.92.93.3
Taiwan Province of China1.81.1-1.1-1.0-1.6-2.6-6.3-7.8-6.6-2.8-3.1-3.4
Other12.412.18.415.013.79.19.815.017.924.716.348.9
China0.4-0.16.78.25.87.15.26.57.70.727.4
Indonesia5.15.33.01.92.92.51.83.04.75.95.77.5
Malaysia3.64.03.11.61.1-0.5-1.20.81.33.83.86.2
Papua New Guinea0.50.30.20.10.10.20.20.30.20.30.20.1
Philippines1.61.20.33.11.20.60.61.41.71.91.62.8
Thailand1.21.31.81.60.10.61.34.33.65.14.24.9
Chile1.7-1.3-0.7-1.7-2.6-0.9-2.10.10.80.50.81.5
Mexico8.3-0.3-0.3-1.30.12.6-5.21.912.821.618.930.3
Memorandum items:
Developing countries62.138.036.623.79.0-3.7-6.01.012.657.152.7104.8
Share of APEC developing countries in total private capital flows (in percent)44.937.527.260.390.868.590.882.185.3
Sources: IMF, Balance of Payments Statistics Yearbook: and IMF staff estimates.

Net medium- and long-term capital excluding exceptional financing and flows related with debt- and debt-service reduction operations. Brunei and Hong Kong are not included owing to the unavailability of data.

Sources: IMF, Balance of Payments Statistics Yearbook: and IMF staff estimates.

Net medium- and long-term capital excluding exceptional financing and flows related with debt- and debt-service reduction operations. Brunei and Hong Kong are not included owing to the unavailability of data.

Table A2.Net Foreign Direct Investment in APEC Developing Countries1(In billions of U.S. dollars)
198219831984198519861987198819891990199119921993
APEC developing countries5.64.44.54.26.08.28.58.412.119.123.439.5
Asia3.63.84.13.64.86.16.94.58.914.018.734.1
NIEs1.31.21.41.32.13.11.1-3.0-0.12.43.02.3
Korea-0.1-0.10.10.20.30.40.70.5-0.1-0.2-0.5-0.5
Singapore1.31.11.20.81.52.63.51.93.93.24.34.3
Taiwan Province of China0.10.10.10.30.3-3.2-5.3-3.9-0.6-0.8-1.5
Other2.32.72.72.32.73.15.87.59.011.615.831.8
China0.40.51.11.01.41.72.32.62.73.57.223.1
Indonesia0.20.30.20.30.30.40.60.71.11.51.82.0
Malaysia1.41.30.80.70.50.40.71.72.34.04.54.3
Papua New Guinea0.10.10.10.10.10.10.10.20.10.20.20.1
Philippines0.10.10.30.90.60.50.50.20.8
Thailand0.20.30.40.20.30.21.11.72.31.82.01.5
Chile0.40.10.10.10.10.21.01.30.60.40.30.4
Mexico1.70.50.40.51.21.80.62.62.54.84.44.9
Memorandum items:
Developing countries22.413.414.310.710.311.616.716.221.428.335.451.6
Share of APEC developing
countries in total foreign direct investment (in percent)25.233.231.938.958.570.350.951.756.467.766.276.5
Sources: IMF, Balance of Payments Statistics Yearbook; and IMF staff estimates.

Brunei and Hong Kong are not included owing to the unavailability of data.

Sources: IMF, Balance of Payments Statistics Yearbook; and IMF staff estimates.

Brunei and Hong Kong are not included owing to the unavailability of data.

Table A3.Net Portfolio Flows to APEC Developing Countries1(In billions of U.S. dollars)
198219831984198519861987198819891990199119921993
APEC developing countries2.00.1-1.06.01.11.5-2.50.80.511.519.937.1
Asia1.10.7-0.36.91.71.2-1.60.3-1.72.36.119.1
NIEs0.10.20.11.1-0.2-0.2-2.5-1.0-1.11.95.010.8
Korea0.20.31.00.3-0.1-0.50.83.15.710.7
Singapore-0.20.2-0.50.3-0.3-0.1-0.9-1.2-1.2-0.1
Taiwan Province of China0.1-0.10.1-0.4-1.7-0.9-1.00.40.2
Other1.00.5-0.45.81.81.50.91.3-0.70.41.18.3
China-0.6-1.63.01.61.10.9-0.2-0.20.2-0.13.0
Indonesia0.30.40.3-0.1-0.1-0.2-0.10.1-0.1
Malaysia0.60.71.11.90.1-0.4-0.1-0.30.20.41.5
Philippines-0.30.1-0.2
Thailand0.10.10.20.90.30.51.5-0.10.84.0
Chile0.20.7-0.10.10.40.30.7
Mexico0.9-0.7-0.8-1.0-0.8-0.4-0.90.41.89.113.417.2
Memorandum items:
Developing countries-7.57.914.213.93.13.63.7-1.02.216.833.255.0
Share of APEC developing countries in total portfolio flows (in percent)0.743.234.443.121.168.559.867.4
Sources: IMF, Balance of Payments Statistics Yearbook; and IMF staff estimates.

Brunei and Hong Kong are not included owing to the unavailability of data.

Sources: IMF, Balance of Payments Statistics Yearbook; and IMF staff estimates.

Brunei and Hong Kong are not included owing to the unavailability of data.

Table A4.International Bond Issues by APEC Developing Countries1(In millions of U.S. dollars)
QIQIIQIIIQIVQIQII
199019911992199319931994
APEC developing countries3,8336,75512,13631,0724,4357,7695,26713,60110,5146,460
Asia1,3562,7735,91619,8562,2303,3003,41610,9107,2075,070
NIEs1,2762,2723,45311,8301,3281,3791,4607,6632,8961,774
Hong Kong661001855,8876576924,5381,305550
Korea1,1052,0123,2085,8646711,3437253,1251,273580
Singapore10586
Taiwan Province of China16060793643318558
Other805012,4638,0269021,9211,9563,2474,3113,296
China1151,3593,0474067511,2096811,500872
Indonesia8036949448530455699750
Malaysia954500454230735
Philippines1,293170175190758154555
Thailand176102,2472964955578991,728384
Chile200120433333100
Mexico2,4773,7826,10010,7832,2054,1361,8512,5913,3071,390
Memorandum items:
Share of APEC issues
Asia35.441.148.763.950.342.564.980.268.578.5
NIEs33.333.728.538.129.917.827.756.327.527.5
Other2.17.420.325.820.324.737.123.941.051.0
Mexico64.656.050.334.749.753.235.119.131.521.5
Total bond issues by developing countries6,33512,83823,78059,43710,10912,11713,49223,71917,6688,443
Share of APEC developing countries in total issuance by developing countries (in percent)60.552.651.052.343.964.139.057.359.576.5
Sources: IMF staff estimates based on Euroweek, Financial Times, International Financing Review, Financial Market Trends, Financial Statistics Monthly, and data from the Organization for Economic Cooperation and Development.

Including note issues under Euro medium-term note (EMTN) programs.

Sources: IMF staff estimates based on Euroweek, Financial Times, International Financing Review, Financial Market Trends, Financial Statistics Monthly, and data from the Organization for Economic Cooperation and Development.

Including note issues under Euro medium-term note (EMTN) programs.

Table A5.International Bond Issues by APEC Developing Countries by Type of Borrower(In millions of U.S. dollars)
1990199119921993First Half

1994
APEC developing countries3,8336,75612,13631,07316,972
Chile200120433
China1151,3593,0482,371
Hong Kong661001855,8871,855
Indonesia803694934851,449
Korea1,1052,0123,2085,8641,852
Malaysia954965
Mexico2,4773,7836,10110,7834,697
Philippines1,293709
Singapore10586
Taiwan Province of China1606079876
Thailand176102,2472,112
Sovereign borrowers408207971,4272,012
Chile200120
China5821,823
Mexico40620377352
Philippines150
Thailand300343189
Other public sector2,6862,0294,78312,7525,158
China1151,3592,443548
Hong Kong102
Indonesia80250179
Korea7557051,7423,987437
Malaysia954600
Mexico1,8511,1921,4324,4013,240
Philippines615154
Thailand17250
Private sector1,1073,9076,55816,8949,802
Chile433
China23
Hong Kong1001855,7851,855
Indonesia3692434851,270
Korea3501,3071,4661,8771,415
Malaysia365
Mexico5861,9714,2926,0301,457
Philippines528555
Singapore10586
Taiwan Province of China1606079876
Thailand3101,6541,923
Memorandum items:
Share in total APEC issues
(in percent)
Sovereign issues012.16.54.611.9
Other public issues70.130.039.441.030.4
Private sector issues28.957.854.054.457.8
Share of APEC issues in total developing country issues60.552.651.052.365.0
Source: IMF staff estimates based on information from International Financing Review, Euroweek, and Financial Times.
Source: IMF staff estimates based on information from International Financing Review, Euroweek, and Financial Times.
Table A6.Yield Spreads at Launch for Unenhanced Bond Issues by APEC Developing Countries1(In basis points)
QIQIIQIIIQIVQIQII
199019911992199319931994
APEC developing countries397348214181210198167162129242
Asia1071121129010712691244
NIEs108941078386966779
Other10513511895121190102274
Chile and Mexico397348314288317293277263175227
Sovereign borrowers18615213019794888998
China8889889498
Philippines320320
Thailand10067577454
Chile150150
Mexico201215189208149
Other public sector366273136122113120142117142153
China11082576498108145
Indonesia129158
Korea89838286898167
Malaysia9610091
Philippines250310265217178250
Thailand404338
Mexico366247205192190182213187154126
Private sector613533293258302290237222149306
Hong Kong18011813383126115
Indonesia410500405467
Korea11687867690926869
Philippines375375340
Thailand4360587512794
Chile194210170
Mexico613533377358413347365331
Memorandum items:
All developing countries245346282259288274249243187259
Sovereign borrower151261222230236248223223134180
Other public sector250373232179199187200148177162
Private sector650493376348424370339315256337
Latin America
(excluding Chile and Mexico)449455426400581481332371306360
Source: IMF staff estimates based on information from International Financing Review, Euroweek, and Financial Times.

Yield spread measured as the difference between the bond yield at issue and the prevailing yield for industrial country government bonds in the same currency and of comparable maturity. All figures are weighted averages.

Source: IMF staff estimates based on information from International Financing Review, Euroweek, and Financial Times.

Yield spread measured as the difference between the bond yield at issue and the prevailing yield for industrial country government bonds in the same currency and of comparable maturity. All figures are weighted averages.

Table A7.Enhancements of International Bond Issues by APEC Developing Countries1
1990199119921993First Half

1994
(In percent of total number of issues)
Number of issues featuring enhancements
APEC developing countries3640313459
Convertible1032142548
Secured194932
Put option106171329
Warrant31
Asia2057384664
NIEs2151385179
Convertible2151214470
Put option212036
Warrant101
Other86394045
Convertible86303434
Put option29301930
Warrant
Chile and Mexico4418241330
Convertible42215
Secured30918810
Put option159825
Warrant1
All developing countries2733222548
Convertible62071436
Guaranteed21123
Secured144733
Put option69121122
Warrant11
(In percent of total funds raised)
Value of enhanced bonds
APEC developing countries4434302643
Asia843183347
NIEs935163862
Other77212738
Chile and Mexico6428411330
All developing countries3131202143
Asia739183550
Europe11815
Middle East and Africa10010090
Western Hemisphere5934261223
Source: IMF staff estimates based on information from International Financing Review, Euroweek, and Financial Times.

Totals by region may be smaller than the sum of their components because some issues feature multiple enhancements.

Source: IMF staff estimates based on information from International Financing Review, Euroweek, and Financial Times.

Totals by region may be smaller than the sum of their components because some issues feature multiple enhancements.

Table A8.International Bond Issues by APEC Developing Countries by Currency of Denomination
1990199119921993First Half

1994
(In millions of U.S. dollars)
U.S. dollars3,0584,9789,78425,65614,035
Asia8351,6824,14316,1559,338
NIEs7551,3472,84810,1332,899
Other803351,2956,0226,439
Chile and Mexico2,2243,2965,6429,5014,697
Deutsche mark345299388174205
Asia13596125205
NIEs1359612525
Other180
Chile and Mexico210203263174
Yen2597741,3063,4231,009
Asia2597741,3063,0991,695
NIEs2596593171,2621,035
Other1159891,837660
Chile and Mexico324
Other currencies1707046591,8181,037
Asia2213436021,037
NIEs127170163434710
Other51180168327
Chile and Mexico434833161,216
(In percent of total)
Memorandum items:
Share in total issues by APEC
developing countries
U.S. dollar8074818383
Deutsche mark94311
Yen712111110
Other410566
Share in total issues by
developing countries
U.S. dollar6168717481
Deutsche mark2713883
Yen711151310
Other58556
Share in total issues in
global bond market
U.S. dollar3230393637
Deutsche mark8711137
Yen1414131213
Other4751413943
Source: IMF staff estimates based on information from International Financing Review. Euroweek, and Financial Times.
Source: IMF staff estimates based on information from International Financing Review. Euroweek, and Financial Times.
Table A9.International Equity Issues by APEC Developing Countries
QIQIIQIIIQIVQIQII
199019911992199319931994
(In millions of U.S. dollars)
APEC developing countries1,1384,6857,6328,0839301,0361,6444,4711,7951,472
Asia1,0401,0114,4455,3196508271,1072,7341,1161,055
NIEs2544652,2152,2774433932501,191292428
Hong Kong1401,2501,26437425064072
Korea4020015032828150150150209
Singapore2141252726134117140170
Taiwan Province of China5437272219
Other7865462,2303,0422074348571,543824627
China111,0491,908115343550900364247
Indonesia6331672626047467263200342
Malaysia382
Philippines531593926444192
Thailand1002091454661824424116380
Chile9812927111494639671
Mexico3,7643,0582,493280954431,674583346
Memorandum items:
Share of APEC issues
Asia91.421.658.265.869.879.867.361.262.271.7
NIEs22.39.929.028.247.642.315.226.616.329.1
Other69.111.729.237.622.246.752.134.545.942.6
Mexico78.440.130.830.19.237.432.523.528.3
Chile8.61.73.411.05.71.45.34.8
Total equity issues by developing countries1,2625,4369,25911,8651,0003,2002,3515,3123,8233,090
Share of APEC developing
countries in total
issuance by developing
countries (in percent)90.282.282.468.193.032.469.984.247.047.6
Source: IMF staff estimates based on Euroweek, Financial Times, International Financing Review (IFR), and IFR Equibase.
Source: IMF staff estimates based on Euroweek, Financial Times, International Financing Review (IFR), and IFR Equibase.
Table A10.International Equity Issues by APEC Developing Countries by Type(In billions of U.S. dollars)
1990199119921993First Half

1994
APEC developing countries1,1384,6857,6328,0833,267
ADR/GDR1993,6884,1853,3061,430
Other1,0399973,4474,7771,837
Asian countries1,0401,0114,4455,3192,171
ADR/GDR112381,009677578
Other1,0397733,4364,6421,593
NIEs2544652,2152,277720
ADR/GDR200693435578
Other2542651,5221,842142
Other7865462,2303,0421,451
ADR/GDR1138316242
Other7855081,9142,8001,451
Chile and Mexico983,6743,1872,7641,096
ADR/GDR1903,4493,1762,700852
Other82251164244
Memorandum items:
All developing countries1,2625,4369,25911,8656,913
ADR/GDR1994,0444,8956,4754,781
Other1,1631,3924,3645,3902,132
Source: IMF staff estimates based on information from Euroweek, Financial Times, and International Financing Review.

European depository receipts are included in ADR/GDR.

Source: IMF staff estimates based on information from Euroweek, Financial Times, and International Financing Review.

European depository receipts are included in ADR/GDR.

Table A11.Emerging Market Equity Funds Designated for APEC Developing Countries1(Net assets in billions of U.S. dollars)
Net AssetsNumber of FundsNet AssetsNumber of FundsNet AssetsNumber of FundsNet AssetsNumber of FundsNet AssetsNumber of FundsNet AssetsNumber of Funds
198819891990199119921993
APEC developing countries2.7354.5625.31016.71199.219716.9231
Asia2.4344.0584.4935.21107.318513.9219
NIEs1.4141.8171.7222.2373.0725.992
Korea1.0101.2131.2171.3241.7383.456
Taiwan Province of China0.440.640.550.9130.9151.916
Other1.0202.2412.7713.0734.71138.6127
China2230.141.3343.248
Indonesia10.370.5180.4180.4210.922
Malaysia0.130.270.5170.6170.6231.021
Philippines30.370.280.380.490.710
Thailand0.8111.4181.4251.6261.9262.926
Chile0.220.440.740.941.14
Mexico0.310.320.540.851.081.98
Memorandum items:
Share of APEC developing countries in emerging market equity funds (in percent)46.438.545.443.739.944.934.941.032.342.424.040.3
Total emerging market equity funds5.99110.014213.322519.229029.246572.5573
Of which:
Global funds0.9151.4182.3293.8397.87824.8108
Asian funds4.4727.41129.217411.621116.531237.9372
Of which: Regional1.8353.1504.0755.4928.011521.5130
Latin American funds0.541.091.5163.5334.5649.178
Of which: Regional0.220.451.5182.0405.253
Sources: Emerging Market Funds Research, Inc; and Lipper Analytical Services, Inc.

Excludes Hong Kong.

Sources: Emerging Market Funds Research, Inc; and Lipper Analytical Services, Inc.

Excludes Hong Kong.

Table A12.Net Equity Flows to APEC Developing Countries Through Emerging Market Mutual Funds1(In millions of U.S. dollars)
19891990199119921993
APEC developing countries-311,3661,0351,2401,518
Asia51,1431,2061,1171,310
NIEs837757791,0011,146
Korea1604073523421,131
Taiwan Province of China-7836842738890
Other1971,46910783557
China-1426401,016857
Indonesia13228514630-35
Malaysia/Singapore9233154-64-140
Philippines131302-693-84
Thailand-145525-64-150-540
Chile118124-137-4
Mexico-15499-158117213
Memorandum items:
Share of APEC developing countries in emerging market equity funds (in percent)21.141.213.710.3
Total emerging market equity funds7846,4642,5118,17612,689
Of which:
Global funds-321,0764573,9086,372
Asian funds6204,6321,7983,1135,023
Of which: Regional3171,9768761,5773,075
Latin American funds120652577381,403
Of which: Regional1061852674461,320
Sources: IMF staff estimates based on data from Emerging Market Funds Research, Inc.; and Upper Analytical Services, Inc.

Excludes global funds and regional funds targeting Asia and Latin America: excludes Hong Kong.

Sources: IMF staff estimates based on data from Emerging Market Funds Research, Inc.; and Upper Analytical Services, Inc.

Excludes global funds and regional funds targeting Asia and Latin America: excludes Hong Kong.

Table A13.International Bond Issues by Country and Sector, 1990–June 1994
APEC Developing CountriesChileMexicoHong KongKoreaSingaporeTaiwan Province of ChinaChinaIndonesiaMalaysiaPhilippinesThailand
(In millions of U.S. dollars)
Financial sector28,26111,8891,6136,1731004,4651,4293792,214
Banks22,97211,5886,1731002,0699293791,734
Other5,2893011,6132,396500480
Petroleum5,3333,92725095490112
Real estate4,3631253,10822200769
Utility3,7773502,422600405
Cement3,2982,795111276524555
Manufacturing2,1901,14055047030
Steel2,1342201831,576154
Telecommunications1,9821831,450100250
Electrical1,8202351501,00738345
Construction1,78486018534743230120
Other115,8285704,8482,2931,5701915842,4281,1511356231,572
Total70,77075327,8398,09314,0421911,1756,8932,8771,9192,0024,986
(In percent of total)
Financial sector39.942.719.944.08.564.849.718.944.4
Banks32.541.644.08.530.032.318.934.8
Other7.51.119.934.817.49.6
Petroleum7.514.11.849.74.52.2
Real estate6.20.438.40.810.015.4
Utility5.31.317.231.320.2
Cement4.710.00.10.95.58.52.7
Manufacturing3.14.16.83.31.0
Steel3.00.82.311.23.1
Telecommunications2.824.35.20.712.5
Electrical2.60.81.97.232.60.9
Construction2.53.12.32.53.712.02.4
Other122.475.717.428.311.2100.049.735.240.07.031.131.5
Source: IMF staff estimates based on information from International Financing Review, Euroweek, and Financial Times.

Includes sovereign issues.

Source: IMF staff estimates based on information from International Financing Review, Euroweek, and Financial Times.

Includes sovereign issues.

Table A14.International Equity Issues by Country and Sector, 1990–June 1994
APEC Developing CountriesChileMexicoHong KongKoreaSingaporeTaiwan Province of ChinaChinaIndonesiaMalaysiaPhilippinesThailand
(In millions of U.S. dollars)
Telecommunications4,651983,159401251316426
Financial sector3,339711,0921,60782932062749112
Banks1,6527160359582200596
Other1,6874891,012936274416
Manufacturing2,7791,082491,460124559
Electronics1,757737055401004810484994
Media1,5161,516
Steel1,2481113011240050986
Transportation1,2172193642503033447
Real estate79125010222772140
Petroleum63140342249
Cement461461
Other6,5053122,6851631243093866661,36710445344
Total24,89566510,2442,7251,0771,2948343,5792,0083826701,417
(In percent of total)
Telecommunications18.714.730.031.065.747.230.1
Financial sector13.410.710.759.06.32.610.37.17.37.9
Banks6.610.75.921.86.310.00.76.8
Others6.84.837.12.60.37.16.61.1
Manufacturing11.210.64.540.86.28.20.6
Electronics7.111.025.950.17.75.82.94.214.80.3
Media6.114.8
Steel5.016.70.38.748.014.26.1
Transportation4.92.133.819.38.55.13.3
Real estate3.29.22.811.310.79.9
Petroleum2.53.19.617.6
Cement1.94.5
Other26.146.926.26.011.523.946.318.668.127.26.724.3
Source: IMF staff estimates based on information from International Financing Review, Euroweek, and Financial Times.
Source: IMF staff estimates based on information from International Financing Review, Euroweek, and Financial Times.
Table A15.Net Purchases of Foreign Bonds by U.S. Investors(In billions of U.S. dollars)
198819891990199119921993
APEC countries-1.5-1.3-1.2-6.60.34.8
Asia-1.6-1.2-1.1-6.9-1.3-1.4
NIEs-1.2-1.1-1.2-6.2-0.5-2.4
Hong Kong-0.8-0.8-0.3-4.1-0.9-1.9
Korea-0.8-0.20.20.71.51.8
Singapore0.4-0.1-0.6-0.40.50.2
Taiwan Province of China-0.5-2.3-1.6-2.5
Other-0.4-0.10.1-0.7-0.81.0
China-0.10.1-0.2-0.4-0.40.2
Indonesia0.4
Malaysia-0.10.3-0.1-0.50.4
Philippines-0.2-0.2-0.2-0.1
Thailand-0.1-0.10.3
Chile-0.1-0.2-0.7-0.1
Mexico0.10.10.52.36.4
Source: U.S. Department of the Treasury, Treasury Bulletin.
Source: U.S. Department of the Treasury, Treasury Bulletin.
Table A16.Net Purchases of Foreign Equities by U.S. Investors(In billions of U.S. dollars)
198819891990199119921993
APEC countries0.50.32.43.18.216.1
Asia0.40.21.31.15.310.6
NIEs0.20.21.10.94.68.9
Hong Kong0.3-0.30.61.13.66.3
Korea0.51.3
Singapore0.40.5-0.20.51.2
Taiwan Province of China0.1
Other0.20.20.20.71.7
China0.1
Indonesia0.10.20.3
Malaysia0.10.21.1
Philippines0.20.1
Thailand0.10.10.1
Chile0.10.1-0.10.10.3
Mexico1.12.12.85.2
Source: U.S. Department of the Treasury, Treasury Bulletin.
Source: U.S. Department of the Treasury, Treasury Bulletin.
Table A17.Portfolio Flows from Japan to Southeast Asia and China1(In billions of U.S. dollars)
198819891990199119921993
Portfolio investment (net)-5.3-4.411.00.9-0.2
Assets-0.2-0.50.2-0.9-1.1
Liabilities-5.1-3.9-0.211.92.0-0.2
Memorandum items:
Medium- and long-term capital (net)-13.4-3.421.342.112.2-1.0
Of which: Foreign direct investment (net)-3.2-5.5-5.5-3.2-2.4-2.1
Japan’s current account surplus
vis-à-vis Southeast Asia and China17.411.914.228.839.654.6
Source: Japan, Ministry of Finance, Zaisei KinyuTokei Geppo (various issues).

Southeast Asia comprises the Islamic State of Afghanistan, Bangladesh, Bhutan, Brunei, Hong Kong, India, Indonesia, Korea, Macao, Malaysia, Maldives, Myanmar, Nepal Pakistan, the Philippines, Singapore, Sri Lanka, Taiwan Province of China, and Thailand. A minus sign indicates net outflows from Japan.

Source: Japan, Ministry of Finance, Zaisei KinyuTokei Geppo (various issues).

Southeast Asia comprises the Islamic State of Afghanistan, Bangladesh, Bhutan, Brunei, Hong Kong, India, Indonesia, Korea, Macao, Malaysia, Maldives, Myanmar, Nepal Pakistan, the Philippines, Singapore, Sri Lanka, Taiwan Province of China, and Thailand. A minus sign indicates net outflows from Japan.

Table A18.Samurai Bond Issues by APEC Developing Countries(In millions of U.S. dollars)
1990199119921993
APEC developing countries2425861,1452,401
China260829917
Hong Kong69371
Korea173290316719
Malaysia450
Mexico315
Memorandum item:
APEC developing countries
(in billions of yen)3579145267
Source: Japan, Ministry of Finance.

Reflects a private placement.

Source: Japan, Ministry of Finance.

Reflects a private placement.

Table A19.Net Purchases of Equities in Asian Stock Exchanges by Japanese Investors(In millions of U.S. dollars)
1992199319941
Net PurchasesStockNet PurchasesStockNet PurchasesStock
APEC developing countries-1171,8117382,8264632,938
China11
Hong Kong841,0334321,3801991,402
Korea
Singapore-156526369457713
Indonesia-41191313719129
Malaysia167255443190521
Philippines212512
Thailand-446533167-4170
Source: Japan Securities Dealers Association.

First seven months of 1994.

Source: Japan Securities Dealers Association.

First seven months of 1994.

Table A20.List of Developing Country Stock Exchanges Designated by the Japanese Securities Dealers Association
Stock ExchangesDate of Designation
APEC developing countries
Hong Kong Stock ExchangeJune 1, 1977
Kuala Lumpur Stock ExchangeJune 1, 1977
Singapore Stock ExchangeJune 1, 1977
Philippine Stock ExchangeJune 1, 1977
Stock Exchange of ThailandDecember 14, 1987
Jakarta Stock ExchangeDecember 26, 1989
Mexican Stock ExchangeJune 28, 1990
Shanghai Stock ExchangeMarch 10, 1994
Shenzhen Stock ExchangeApril 20, 1994
Non-APEC developing countries
Buenos Aires Stock ExchangeJune 17, 1992
Source: Japanese Securities Dealers Association.
Source: Japanese Securities Dealers Association.
Table A21.Net Assets of Emerging Market Country Funds Listed on the Osaka Securities Exchange(In millions of U.S. dollars; end of period)
Date

Listed
1992199319941
Korea Fund12/91238491591
Korea Equity Fund12/939386
Morgan Stanley Asia
Pacific Fund8/94751
Singapore Fund12/9151118116
Thai Capital Fund12/9172134125
Total3618361,669
Source: Japan, Ministry of Finance.

At the end of August.

Source: Japan, Ministry of Finance.

At the end of August.

39For an analysis of these issues for several APEC countries see Section II, and Bercuson and Koenig (1993).
40Several APEC developing countries are currently experiencing financial sector problems. In Malaysia, nonperforming loans rose sharply after the onset of recession in 1985 and peaked at 32 percent of total bank loans in 1988; this ratio fell to 12 percent at end-1993. In Indonesia, nonperforming loans held by commercial banks increased significantly in the early 1990s, reaching 16 percent of outstanding loans; this ratio fell from 14 percent in June 1993 to 5 percent in March 1994. in part the result of a reduction in the value of loans at problem banks and because of growth in new loans. Nonperforming loans in Korea amounted to 6 percent of total bank loans in mid-1993. and in Mexico, nonperforming assets rose from 2 percent of bank loans in 1991 to 6 percent in September 1993. These asset quality data compare unfavorably to the asset quality in several industrial countries known to have had recent banking problems. Among the Nordic countries, nonperforming loans as a percent of total commercial bank loans peaked in 1992 at 9 percent in Finland. 7 percent in Norway, and 8 percent in Sweden. In the United States, delinquent loans reached 6 percent of commercial bank loans in 1991. In Japan, the official estimate of nonperforming loans among the 21 major banks was 3 percent at end-March 1993.
41The savings and loan crisis in the United States and the banking crises in the Nordic countries are recent examples of how bad credit decisions can weaken the banking system. The recent debt and asset price deflations in many industrial countries illustrate how the combination of expansionary macroeconomic policies, rapid financial liberalization. and an inadequate supervisory and regulatory framework can lead to costly problems. See International Monetary Fund (1993) and Sehinasi and Hargraves (1993).
42When the local bank lends funds to the importer, it simultaneously books a foreign currency loan and a foreign currency deposit to the importer. The local bank executes the transaction by drawing on its deposit in the foreign currency bank. At the end of the transaction, the local bank has a liability to the foreign currency bank and a foreign currency loan to the importer.
43If the local authorities permit residents to hold foreign currency deposits, the foreign currency deposit base can be expanded by the same process.
44For example, most of the bond portfolio inflows, which have dominated portfolio inflows into APEC developing countries in recent years, originated in the Euromarkets and are denominated in one of the major currencies. Thus, when nonresidents purchase Eurobonds issued by APEC borrowers, they transfer foreign currency deposits 10 APEC borrowers. If these borrowers hold their deposits in the local banking system, bond purchases have the same impact on the domestic financial system as a direct increase in domestic bank foreign liabilities.
45The need to limit the impact of capital inflows on the money supply is more pronounced for countries that operate fixed or managed exchange rate regimes, which is the case of many APEC developing countries.
46The effectiveness of reserve requirements depends on whether investors are able to circumvent them. In many industrial countries, investors can avoid reserve requirements by acquiring financial assets that are close substitutes for bank deposits, such as money market mutual funds, and thereby render sterilization ineffective. In most developing countries, however, close substitutes for bank deposits do not exist and so reserve requirements can often be used as an effective sterilization tool.
47Between 1991 and 1993, the cost of maintaining reserves at the central bank is estimated to have increased by about 23.5 percent, whereas the margin increased by 22.7 percent during this period.
48These restrictions were relaxed later in the year.
49In 1986, short-term money instruments (monetary stabilization bonds) were also introduced to manage liquidity. However, the central bank continues to impose high reserves ratios (11.5 percent) on demand and time deposits.
50In the case of Chile, the Quasi-fiscal costs associated with intervention policies are estimated to have been 1.4 percent of GDP; see Kiguel and Leiderman (1994).
51The government deposits held at the Bank of Thailand increased from 25 percent of total deposits in 1987 to 82 percent in mid-1992.
52In the Nordic countries, public funds (including deposit insurance funds) were expended during 1991–93 to resolve the banking crises. As a share of 1992 GDP, these public expenditures amounted to 8 percent in Finland, 4 percent in Norway, and 6 percent in Sweden. In 1992. the estimated total cost of resolving the U.S. savings and loan crisis and problems in the commercial banking industry was nearly 4 percent of GDP. The large capital flows in Chile in the late 1970s, combined with the full state guarantee to bank deposits and the ownership of banks by industrial or financial conglomerates to which cheap credit was granted, led to the banking crisis in 1982, after the economy was subject to external shocks. The cost of rescuing the banks over the period 1982–85 has been estimated at 44 percent of Chile’s 1985 GDP. See Fischer and Reisen (1992).
53In Korea, the main objective during the 1970s was to ensure funding for heavy industry. Since then, the emphasis has switched toward small and medium-sized enterprises. In Malaysia, the main objective has been to ensure access to credit by the Bumiputera population and by small-scale enterprises. In Indonesia, the Philippines, and Thailand, small-scale and agricultural borrowers were the target. These loans were often funded by the authorities directly (as in Korea through government funds allocated to the banks) or indirectly through central bank rediscounting. and usually carried interest rates well below those paid by other borrowers. In Korea, policy loans accounted for almost half of nationwide commercial bank loans through the 1970s and 1980s and even in 1990, almost ten years after these banks were privatized (see Nam (1993)). In some of the other countries, the aggregated policy lending requirements reached similar proportions of total commercial bank lending.
54A true picture of risk exposures can be obtained only from detailed audits of bank balance sheets.
55See Nasution (1993). Other examples are Korea and Taiwan Province of China, where the use of dummy accounts and borrowed names is widespread. In these circumstances, it is not possible to enforce restrictions against concentrations of lending to the bank shareholders.
56The Appendix contains summary descriptions of essential elements of commercial bank regulations drawn, in most cases, from published sources only. Errors and omissions may exist where relevant information is not readily available or, as in the case of Taiwan Province of China, where there is no official contact with the International Monetary Fund.
57In the United States, nonperforming loans include all loans that are at least 90 days overdue and all “substandard” and “loss” loans. In Japan, nonperforming loans are defined as loans to bankrupt borrowers and loans that are 180 days or more overdue.
58In the European Union, banks face a limit of 25 percent of capital on each of their large exposures—a transitional limit of 40 percent is applied in some cases—with the added condition that all exposures in excess of 10 percent of capital may not exceed eight times capital. In the United Slates, the large exposure limit is 15 percent of capital plus surplus, and in Japan the limit on exposures of ordinary banks to single borrowers and their subsidiaries is 40 percent of equity.
59See Feldman and Kumar (1994) for a discussion of the potential contributions equity markets can make to growth in developing countries.
60In addition, as Table 4-3 highlights, volatility in emerging markets, as measured by the standard deviation of stock returns, remains very high by industrial country standards. For the period January 1992 to July 1994, daily stock returns in these emerging markets were twice as variable as stock returns in the United States.
61The increase in volatility spillover in Mexico, when portfolio flows became volatile, is statistically significant at the 1 percent level (see Table 4-4). The subsequent drop in spillover, when portfolio flows became less volatile, is also highly significant. In Thailand, there was a significant drop in volatility spillovers when portfolio flows became less volatile.
62The increased volatility in Hong Kong may have been related to sudden reversals of investor sentiment about the prospects for investment in China.
63This is also true for Chile, another country that has been experiencing a surge in capital flows and a stock market boom; see Reinhart and Reinhart (1994).
64The experience of several Latin American countries during the late 1970s and early 1980s provides some basis for those concerns. In several countries, including Chile and Mexico, the surge in inflows was accompanied by booming equity and real estate prices; the abrupt reversal of those flows in the early 1980s eroded the earlier price gains and. in most instances, left stock prices well below their pre-boom levels; see Calvo, Leiderman, and Reinhart (1994). The impact of this reversal on financial markets and on the banking sector was substantial and is shown to have played a key role in spawning the banking crises that followed; see Rojas-Suárez and Weisbrod (1994). Similar, if less acute, adverse effects on the banking sector are also evident in industrial countries; see Schinasi and Hargraves (1993).
65The only relevant (but minor) constraint in Hong Kong is the financial resources rule in the Securities Ordinances in which a broker’s secured receivables may be counted as liquid assets only to the extent of the market value of the securities held as collateral. Generally, brokers operating in Hong Kong impose their own restrictions. The common initial margin level is 50 percent of the value of the collateral. Hong Kong also allows short selling as of January 1994, but only for some of the component stocks of the Hang Seng index. For borrowing of more than 14 days, a 15-basis point stamp duty is levied on both the borrower and the lender on top of the transaction stamp duty.

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