World Bank Document · Pakistan and Sri Lanka return to international bond market. 7 EUROPE AND CENTRAL ASIA REGION ISSUES $2.8 BILLON Croatia debuts in market. Hungary issues Samurai

* 1997

A World Bank Business Quarterly VoLJ1 No. 3p6

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-- Wm~~41

Financial flows to developing countries quarter. Project finance activity slowed, with

dropped with the seasonal slowdown in the the private sector accounting for 80% of vol-

first quarter, but terms on borrowing ume. Stock markets rose 9% in the first quar-

improved, stock markets boomed, and sec- ter, with sharp rises in January and February

ondary market debt prices showed continued followed by a decline in March as US stocksstrength. Bonds maintained the same pace as fell. Markets in Europe, the Middle East, and

last year, with Latin America (largely Africa rose by 19% on average, and the Latin

sovereign borrowers) accounting for 61% of American index was up 15%. New equitiestotal volume. East Asia was second, with most issues declined 60% from their high of the

bonds issued by private sector borrowers. fourth quarter. East and South Asia raised $2.4

Spreads declined and maturities lengthened billion, or 85% of total issues. Of official flows,compared with last year's averages. Fixed-rate multilateral commitments dropped from $15and dollar-denominated issues again billion in the fourth quarter to $4 billion in

accounted for the bulk of funds. Secondary the first quarter of 1997, largely because of sea-

market prices continued to rise, aided by low sonal factors. The World Bank's Multilateral

US interest rates. Loan commitment volume Investment Guarantee Agency (MIGA) is

of $20 billion was only 56% of the fourth-quar- backing the creation of an information

ter level, butjust below the $21.5 billion bor- exchange for infrastructure investment in

rowed in the first quarter a year ago. Private Latin America. The Bank published two

sector borrowers led East Asia to the highest reports on capital flows to developing coun-

share (one-third) of total loan commitments. tries highlighting the strong rise in privateTerms on borrowing were stable in the first capital flows over the past few years.

International lending and capital markets

6 Bonds

6 BOND MARKETS REMAIN STRONG

6 PRIVATE SECTOR DOMINATES EAST ASIAN BOND ISSUES

Philippines is largest regional issuer. China issues range of bonds. Malaysia has two public sector

issuances. Thai bond issues total $700 million.

6 BOND VOLUMES FROM SouTH ASIA RISE TO $0.9 BILLION

India issues century bond. Pakistan and Sri Lanka return to international bond market.

7 EUROPE AND CENTRAL ASIA REGION ISSUES $2.8 BILLON

Croatia debuts in market. Hungary issues Samurai bond. Poland issues Euroconvertible.

Romanian bank taps market. Russia debuts in deutsche mark sector. Turkey present in deutsche

mark, lira markets. Estonian bank enters market.

7 MIDDLE EAST AND NORTH AFRICA BOND ISSUES UP SLIGHTLY

Lebanese bank returns to market. Oman debuts investment-grade sovereign.

8 LATIN AMERICAN ISSUERS OUTPACE OTHER REGIONS

Argentina launches local currency issue. Mexico second largest issuer from region. Brazil issues

more than $2 billion. Chilean utility issues century bond. Colombia issues 30-year bond. Panamadebuts. Venezuelan phone company issues $200 million. Uruguayan bank issues bond.

9 TERMs ON BORROWING IMPROVE DURING QUARTER

Cost of borrowing falls. Maturities lengthen. Fixed-rate issues continue to dominate. Dollar issues

dominate Asia and Latin America.

FinancialFlows and the Developing Countries

* Contents and Summary

10 SECONDARY MARKET PRICES HIGHER THIS QUARTER

Debt prices post strong gains in January and February, but decline in March. Demand for debt

instruments rises sharply for 1996.

11 Commercial bank loans

11 FOURTH QUARTER LOAN COMMITMENTS REVISED UPWARD

11 LOAN COMMITMENTS DECLINE IN FIRST QUARTER

12 EAST ASIAN PRIVATE SECTOR BORROWS $5 BILLION

Indonesia leads region. Malaysia is second largest borrower. Public sector dominates in China.Thailand borrows in local currency. Philippine firms tap markets.

12 SOUTH ASIA BORROWS $1.3 BILLION IN FIRST QUARTER

India is largest borrower in region. Pakistan is also present in market.

13 EUROPE AND CENTRAL ASIA HAS LARGEST NUMBER OF BORROWERS

Borrowing is split between public and private sectors. Russia leads region. Poland has handful of

deals. Kazakstan borrows to finance construction. Countries borrow for telecommunications,electricity. Commercial banks borrow.

14 LATIN AMERICA BORROWS $4.1 BnITION

Chile, Argentina, and Mexico borrow about $1 billion each. Brazil, Colombia, and Peru are also

in market.

14 SOuTH AFRICA IS MAJOR BORROWER FROM SUB-SAHARAN AFRICA

14 TERMS ON BORROWING STABLE IN FIRST QUARTER

Spreads are same as last year. Maturities shorten. Currency profile of borrowers remains largelyunchanged.

15 PROJECT FINANCING EASES IN FIRST QUARTER

Estimate for 1996 rises. First quarter activity slows. Infrastructure share declines. Average maturityincreases. East Asia maintains largest share. Turkey is sole player from Europe and Central Asia.

Bahrain is in market from Middle East and North Africa. Other regions borrow small amounts.Asians and Europeans are major sources of project finance.

17 BOND AND LOAN MARKETS DIFFER IN COSTS, MATURITY OF FUNDS

Developing countries are shifting to bond markets. Bond markets' costs are higher, maturities are

longer.

18 Market creditworthiness

18 SOVEREIGN CREDrIWORTHINESS RATINGS HIGHEST IN A DECADE

18 CROATIA, DOMINICAN REPUBLIC, LATVIA, MOLDOVA, AND PANAMA RECEIVE FIRST CREDIT RATINGS

Croatia is assigned BBB- credit rating by S&P and a Baa3 by Moody's. S&P assigns a B+ credit ratingto the Dominican Republic in February. S&P assigns a BBB rating to Latvia. Moody's assigns Moldova

a Ba2 credit rating inJanuary. Panama is assigned a BB+ rating by S&P and a Bal by Moody's.

19 EGYPT IS ASSIGNED BBB- RATING BY S&P

19 LEBANON IS ASSIGNED BB- RATING BY MOODY'S, BI BY S&P

19 MOODY'S DOWNGRADES TURKEY

Equity portfolio and foreign direct investment

19 Emerging stock markets

19 OUTLOOK IS FAVORABLE FOR EMERGING MARKETS

May 1997 f

Contents and Summary

19 IFC's INVESTABLE COMPOSITE INDEX (IFCI) RISES 9% IN FIRST QUARTER

20 ASIAN MARKETS SHOW VARIED RETURNS

Chinese stock market falls 1%. Philippines market is also down 1%. Indian stock market rises 7%.

Pakistan's market records a 21% increase. Thailand's stock market drops 16%. Sri Lankan mar-

ket rises 5%. Indonesia's market falls 2%.

20 EUROPE, MIDDLE EAST, AND NORTH AFRICA MARKETS REGISTER HIGHEST REGIONAL GAINS

Stock markets are up in Turkey (54%), Greece (35%), Hungary (21%), Poland (5%), Romania(30%), Zimbabwe (23%), and South Africa (14%).

21 STOCK MARKETS IN SUB-SAHARAN AFRICA ARE SMALL BUT GROWING

21 MOST LATIN AMERICAN MARKETS RECORD DOUBLE-DIGIT INCREASES

Stock markets are up in Brazil (22%), Chile (13%), Mexico (10%), Argentina (7%), Colombia

(21%), and Peru (18%), but down in Venezuela (3%).

22 New equities

22 ISSUANCE OF DEPOSITORY RECEIPTS ON RISE

22 NEW EQUITY ISSUES FALL

Equity issues down from fourth quarter. India has largest issue. China leads issues in the firstquarter. Indonesia issuer raises $32 million. Philippines bank raises $267 million. Slovenia issues

maiden international equity issue. Egypt issues GDR. Turkey raises $5 million. Poland raises $55

million. Sub-Saharan Africa has one issue. Latin America has few issues.

23 NEw MUTUAL FUNDS LAUNCHED

New fund to target Asia. First private investment fund is established for Balkans. Stock exchangemutual fund is established in India. Cuban growth fund is established. Real estate fund is launchedin Poland.

24 Foreign direct investment and privatization

24 AsIAN ECONOMIES CONTINUE EFFORTS TO ATTRACT FOREIGN INVESTORS

Thailand approves foreign investment law. India relaxes investment restrictions. Bangladesh

invites bids for gas exploration rights. Telecommunications contracts are approved. Plans areannounced for industrial gas investment.

24 INVESTMENT PROSPECTS IMPROVE FOR LATIN AMERICA AND THE CARIBBEAN

Survey highlights increased confidence. Prospects improve for flows to Latin America. Investmentplans are announced.

25 WORLD BANK'S MIGA SUPPORTS CREATION OF INVESTMENT INFORMATION EXCHANGE

25 PRIVATIZATION PROGRAMS CONTINUE

Brazil, Guyana, Guatemala, Philippines, Indonesia, China, India, Turkey, Egypt, Jordan,Albania, Poland, Kazakstan, South Africa, Ghana, Guinea, Uganda, C6te d'lvoire, and Zambiahighlighted.

Official flows

26 Multilateral flows

26 MULTILATERAL COMMITMENTS DROP SHARPLY

27 WORLD BANK COMMITMENTS ARE DOWN

27 COMMITMENTS BY OTHER MULTILATERALS FALL

27 ASEAN COUNTRIES EXPLORE CURRENCY FUND

E Financial Flows and the Developing Countries

* Contents and Summary

27 Bilateral ODA and export credits

27 ExpoRT-IMpoRT BANK OF JAPAN DOES ITS FIRST MICROLENDING

27 ExpoRT-IMpoRT BANK OF US LENDS TO INDIA AND INDONESIA

Debt relief update

28 Official creditors

28 PARIS CLUB AGREEMENTS SIGNED WITH ETHIOPIA, MADAGASCAR, TANZANIA, AND GUINEA

28 Commercial creditors

28 THERE WERE NO NEW DEBT RELIEF AGREEMENTS ON COMMERCIAL BANK DEBT DURING THE FIRST

QUARTER

Financial brief: Bank publications on capital flows

Two recent World Bank publications focus on international financial markets. Private Capital Flows to

Developing Countries: The Road to Financial Integration analyzes the implications for developing economies

of increased integration with the world economy and discusses how governments can best manage this

process. Global Developnent Finance 1997 reviews capital flows to developing countries over the past year

and provides comprehensive statistics on net resource flows and external debts of developing countries.

Statistical appendix32 World Bank commitments * 33 New bond issues e 34 New loan issues U 35 New equity issues e

36 Bank and trade-related nonbank claims U 37 Commercial bank claims on developing countries U

38 Commercial bank claims on developing countries, by country of origin a 42 Maturities of bank

claims on developing countries * 43 Funds raised on international capital markets * 44 Secondary

market debt (bid) prices * 45 Emerging stock markets * 46 Country groups

Note: Tables on external debt, aggregate long-term resource flows, and foreign direct investment flows arepublished only as data are updated.

The Republic of Korea is no longer included in the regional aggregates in the text tables or the statisticalannex because it is now classified as a high-income country. This change results in significant differences in thetotals for all developing countries and East Asia and the Pacific from those reported in previous editions. We willcontinue to discuss Korea's financial transactions in the text.

May 1997 ax

Bonds ing from just under 6 years to almost 16. From the

private sector, a Malaysian industrial conglomer-

Bond markets remain strong ate used the offshore market (Cayman Islands) to

Developing countries issued $19.6 billion in inter- issue a $150 million secured euromarket bond.

national bonds during the first quarter, almost THAI BOND ISSUES TOTAL $700 MILLION. A $100

equal to the last quarter's volume. Borrowers from million convertible issue from a private energy util-

Latin America accounted for 61% of the total ity included put and call options; the other Thai

Developing volume for developing countries; East Asia was issues were fixed-rate. The first-ever default on asecond at 18% (table 1). Sovereign borrowers eurobond by Somprasong Land, a property devel-coun tries issuJed accounted for 68% of bonds issued to Latin Amer- oper, and Moody's downgrade of the country's A2

$ 1 9.6 billion in ican countries, while the private sector accounted foreign-currency sovereign ceiling to A3, are likely

international for 73% of East Asian borrowing. Nonsovereign to increase the margins paid by Thailand's borrow-public sector issuers were spread across all regions ers in international bond markets.

bonds during the but Sub-Saharan Africa, which had no interna-

first quarter tional bond issues in the quarter. Bond volumes from South Asia rise to$0.9 billion

Private sector dominates East Asian INDTA ISSUES CENTURY BOND. Reliance Indus-

bond issues tries Ltd., a pioneer of long-dated bonds from India,

PHILIPPINES IS LARGEST REGIONAL ISSUER. issued a $100 million century bond in the first quar-

With close to $1.1 billion in securities, the Philip- ter, the first private sector company in Asia to issue

pines was the biggest issuer from the region. a 100-year bond. The issue was reportedly heavily

Philippines Long Distance Telephone Company's oversubscribed, with the company paying a spread

fixed-rate $500 million bond, issued in two of 355 basis points over US Treasuries. Bond ana-

tranches (of $300 million, 20-year maturity, and lysts note that successful placement of a 100-year

$200 million, 10-year maturity) were reportedly offering is viewed as prestigious, and the cost is not

oversubscribed three times. The issue was placed that much greater than a 30-year security. Industrial

primarily with US investors, with the remainder TABLE Bond issues by type of borrowerplaced with Asian investors. The longer maturity U millions /996 1997

offered investors 170 basis points over the US 1995 1996 Q4 Ql

Treasury rate, and the 10-year maturity offered a All developing countries 47,749 74,630 20,198 19,630

spread of 150 basis points. The yield curve on Private 15,473 22,933 6,788 6,497

other deals from the country extended out to an Sub-Saharan Africa 100 250 0 0EastAsia and the Pacific 6,516 7,872 2,639 2,638

average of about 6 years. South Asia 520 672 222 314

CHINAISSUES RANGE OFBONDS. In the first quar- Europe and Central Asia 541 559 173 313LatinAmerica 7,746 13,421 3,654 3,231

ter China issued a single 10-year fixed-rate bond Middle East and North Africa j 50 160 100 0

from the State Development Bank, which paid 80 Sovereign 1 24,253 41,166 8,777 10,926

basis points over the comparable US Treasury. Chi- Sub-Saharan Africa 496 782 300 0

nese bonds also included an issue convertible into East Asia and the Pacific 560 / 50 0 200

H shares of Qingling Motors, as well as floating-rate Europe and Central Asia 10,204 9,003 2,687 2,366n .Reports suggest that China intends to* Latin America 12,105 27,345 5,474 8,136notes. Reports suggest that Chma mtends to Middle East and North Africa 879 428 0 225

increase its borrowing in the international capital Other public 8,023 10,530 4,633 2,207

markets this year to finance infrastructure. Sub-Saharan Africa 396 140 0 0

MALAYSIA HAS TWO PUBLIC SECTOR ISSUANCES. East Asia and the Pacific 3,083 4,24/ 2,683 973South Asia 262 220 0 425

Malaysia's Petronas Gas Bhd.'s yen issue was one Europe and Central Asia 1,501 230 130 150of the few public sector issues from the region. Latn America 2,731 5,449 1,720 609

Middle East and North Africa 50 250 100 50The 38 billion yen ($309 million) Samurai issue Note: First quarter figures are as of March 25, 1 997.

was placed in three tranches, with maturities rang- Source: Euromoney Bondware and World Bank.

FinancialFlows and theDeveloping Countiries


Credit and Investment Corp. of India Ltd.'s $100 strategy rather than to serious concerns about its

million 10- year floating-rate note was the first sub- financial health or problems with performance in

ordinated offering from the country as well as the Poland's equity market.

first to be launched from a medium-term note pro- ROMANIAN BANK TAPS MARKET. The Romanian

gram. Industrial Development Bank of India's $150 Commercial Bank brought to market a $75 mil-

million 7-year floating-rate note, launched at 70 lion 3-year note at a spread of 300 basis points over

basis points over 6-month LIBOR, established a US Treasuries (70 basis points higher than the

benchmark for other borrowers in the sector. National Bank of Romania's outstanding dollar Pakistan andPAKISTAN AND SRI LANKA RETURN TO INTERNA- bond in the secondary market). According to ana- Sri Lanka return

TIONAL BOND MARKET. A convertible bond issue lysts, the issue was a success owing to the sizable

from Pakistan Telecommunication Co. Ltd. of coupon payments and recent improvements in to international$150 million (which included put and call Romania's economic outlook. bond marketoptions) met with overwhelming demand. The RUSSIA DEBUTS IN DEUTSCHE MARK SECTOR.

issue was evenly placed among UK, European, and The Russian Federation's first deutsche mark

Southeast Asian investors. The deal's success is issue, a DM 2 billion ($1163 million) 7-year bond,

also being heralded as a sign of renewed investor established a benchmark in the currency. This was

confidence in the newly elected ruling party. Sri only the second bond issued by the Federation

Lanka returned to international capital markets since 1917. The coupon of 9%, which yielded a

after being absent since 1982, with a $50 million spread of 370 basis points over bunds, was more

3-year floating-rate note. Demand for the offering attractive than other bonds from emerging mar-

was reported to come from banks in the Middle kets in the deutsche mark sector and more attrac-

East and the Republic of Korea. tive than secondary market spreads of 325-330

basis points on Russia's outstanding eurodollar

Europe and Central Asia region issues bond.

$2.8 billion TURKEY PRESENT IN DEUrSCHE MARK, LRA MAR-

CROATIA DEBUTS IN MARKET. Croatia tapped KETS. Turkey enjoys an established investor base in

international bond markets for the first time with the deutsche mark market. Last quarter Turkey

a $300 million 5-year issue launched at a spread of issued a DM 500 million ($307 million) 7-year bond

80 basis points over the risk-free rate. Using the with a spread of 275 basis points over bunds. Turkey

full potential of the investment-grade rating the also issued a 300 billion lira ($180 million) bond,

country received inJanuary, Croatia increased the which carried a maturity of 5 years, paying 246 basis

issue from its original size and lengthened the points over comparable risk-free securities.

maturity from 3 to 5 years. ESTONIAN BANK ENTERS MARKET. The Estonian

HUNGARY ISSUES SAMURAI BOND. The National Investment Bank placed a DM 30 million ($18 mil-

Bank of Hungary issued a 50 billion yen ($414 million) floating-rate note in the market. The private

lion) 7-year Samurai issue, after being absent from sector borrower paid 1% over 3-month LIBOR to

that sector since December 1995. Analysts believe secure funding for 3 years.

one objective is to maintain Hungary's presence

with Japanese investors. The bond was launched Middle East and North Africa bondat a spread of 38 basis points over LIBOR. issues up slightly

POLAND ISSUES EUROCONVERTIBLE. The first LEBANESE BANK RETURNS TO MARKET. Banque

convertible eurobond from Eastern Europe was de la Mediterranee, a familiar name in interna-

issued by Poland's Stalexport. The $50 million 5- tional markets from Lebanon, raised $50 million

year deal was launched at a spread of 150 basis through a fixed-rate 5-year deal. The issue was

points over the risk-free rate. The issue's price fell reduced in size because of concerns about

immediately after the launch, which analysts increases in US interest rates and the assignment

attribute to the company's over-optimistic pricing of a lower-than-expected credit rating to the coun-

May 1997 f


try. The spread of 260 basis points offered sovereign to tap the 10-year sector. In February

investors 125 basis points over the outstanding the government launched a tightly priced (260

dollar issue of Lebanon. Primary investors were basis points) DM 1.5 billion ($916 million) deal,

from the Middle East and Switzerland. which was quickly sold out. Good performance of

OMAN DEBUTS INVESTMENT-GRADE SOVEREIGN. the emerging-market deutsche mark bonds in the

The Sultanate of Oman, the first investment- past year encouraged institutional investors'inter-

grade Arab sovereign from the region, made a suc- est. In March Mexico issued a Samurai bond worth

Argentina cessful debut in the markets with a $225 million 50 billion yen ($402 million) ,which paid investors

topped the 5-year deal. Reportedly, the issue was twice over- 176 basis points overJapanese government bonds.subscribed. Priced at 73 basis points over US Trea- BRAZIL ISSUES MORE THAN $2 BILLION. Brazil

list of borrowers suries, itwasplacedwithavarietyofinvestorsfrom launched a DM 1 billion ($610 million) 10-year

in international Asia, Europe, Middle East, and the US. issue at a spread of 230 basis points over bunds.The issue benefited from the scarcity factor, as the

markets Latin American issuers outpace other government had been absent from the deutsche

regions mark sector for the past two years.

ARGENTINA LAUNCHES LOCAL CURRENCY ISSUE. CHILEAN UTILITY ISSUES CENTURY BOND.

Argentina topped the list of borrowers in interna- Endesa Chile Overseas Company, a public elec-

tional markets, with more than $4 billion issued. tricity generating company in Chile, issued the

Argentina first tapped the market with a $2 billion region's first century bond, for $200 million, at a

fixed-rate 20-year issue at 460 basis points over 30- spread of 127 basis points over US Treasuries. The

year US Treasuries. The largest single emerging- issue had the tightest spread and the greatest

market global bond, the issue was a major success. value for a dollar-denominated century bond by a

Argentina then launched a 10-year local currency non-US borrower. The century bond was part of a

500 million europeso bond ($500 million), at a three-tranche issue totaling $650 million; the

spread of 160 basis points over Argentine govern- other tranches had 30- and 40-year maturities.

ment dollar-denominated bonds. It was the COLOMBIA ISSUES 30-YEAR BOND. Taking

region's first long-dated local currency issue from advantage of positive investor sentiment toward

a non-investment-grade issuer. Argentina made the region and the availability of funds in the mar-

news in the deutsche mark sector by issuing a DM ket, Colombia extended its yield curve to 30 years

1.5 billion ($891 million) note for 7 years at a through a $250 million tranche of its $1 billion

spread of 195 basis points over bunds, thus break- global bond issue. The tranche paid 170 basis

ing the psychological barrier of 200 basis points for points over US Treasuries. The other tranche, for

spreads on loans to Argentina. 10 years, paid a 130 basis point spread.

MEXICO SECOND LARGEST ISSUER FROM PANAMA DEBUTS. On the heels of receiving its

REGION. Mexico issued a total of $3.3 billion in long-term foreign currency debt rating, Panama

bonds during the first quarter in the US dollar, issued a $500 million 5-year global bond, its first

deutsche mark, lira, and yen markets. United entry into the international bond market. The

Mexican States (UMS) started the year with a $1 government's objective was to establish a bench-

billion global bond issue, which was twice over- mark yield curve for itself as well as a benchmark

subscribed and established a benchmark for a 10- for pricing potential private sector issues. The

year maturity. The coupon was 9.87%, which issue was competitively priced at 175 basis points

resulted in a spread of 335 basis points over US over US Treasuries.

Treasuries. The government made its second VENEZUELAN PHONE COMPANY ISSUES $200 MIL-

foray in the eurolira market with a 500 billion lira LION. The Venezuelan telephone group, CANTTV

($315 million) 10-year deal, launched at a spread Finance Ltd., capitalizing on the establishment of

of 192 basis points over the risk-free rate. the company's name through last year's successful

Argentina had been the only Latin American initial public offering, issued $200 million in Yan-

Financial Flows and the Developing Countries

* International lending and capital markets

kee bonds, which were massively oversubscribed. spreads, but there was no reduction for India and

Given the strong investor interest, the deal was split Thailand. Almost all major borrowers in Latin

into two equal tranches, paying 285 basis points for America saw a significant reduction in spreads.

the 7-year maturity and 260 basis points for the 5- MATuRIFIEs LENGTHEN. Several developing

year maturity. The issue was placed primarily with countries were able to lock in funding for longer

US institutional investors. maturities and at the same time to establish bench-

URUGUAYAN BANKISSUES BOND. A private bank markyield curves. In some cases countries were able

in Uruguay issued a $100 million 10-year bond to significantly lengthen maturities in response to Spreadswith a put option. The bond paid investors 172 high demand for issues (figure 3). Other countries C* ibasis points over US Treasuries.uis

borrowers fellTerms on borrowing improve during FIGURE 2 Spreads on international bond

issues, 1 997Q I about 50 basisquarter Basis points over benchmark points

COST OF BORROWING FALLS. Sou-nd economic pitpolicies by many developing country borrowers, Latin America 283

growing investor acceptance of developing coun- Europe and .- Central Asia ~~~ :265

try paper, and high levels of liquidity in interna- Central Asia IP I :

tional markets contributed to a first-quarter South Asia _ _ 2 0 4

decline in spreads over those a year ago (figure 1). East Asia 158

Spreads facing sovereign borrowers fell about 50 All 243basis points, with Mexico enjoying the greatest

decline (150 basis points). Spreads for other pub-

lic sector borrowers fell about 125 basis points to Argentina 1384

an average 165 basis points during the first quar- Mexico377

ter. But spreads still varied widely, with China pay-Brazil wo . r ~~306

ing as little as 80 basis points and Brazil as much Brazi

as 325 (figure 2). The private sector saw the Romania -300

biggest drop (170 basis points) over last year. In Greece 284

Asia, Indonesia and the Philippines enjoyed lower Venezuela

Lebanan _2 6FIGURE I Major private sector spread _nd2a

declines over 1996 India! ,265

Basis points Indonesia -

Indonesi .265

Uruguay __203 Panama 175

U y 23Uruguay 172Philippines 121

Colombia ISO

Mexico 110 Poland ISO

Argentina 83 Philippines 141

Thailand 123Brazil 77

Venezuela X 9Croatia 80

Indonesia 54 China 80

Note: Calculations based on US dollar-denominated issues. Note: Calcu ations based on US dollar-denominated issues.Source: Euromoney Bondware and World Bank. Source; Euromoney Bondware and World Bank.

May 1997 f


capitalized on the success of previous issues to FEXED-RATE ISSUES CONTINUE TO DOMnNATE.

lengthen maturities in subsequent issues. The aver- There was no significant change in the composi-

age maturity of bond issues came to a little over 11 tion of bond issues between the last quarter of

years (figure 4). South Asia's 23 years was the 1996 and the first quarter of 1997. Fixed-rate

longest average maturity for a region, although if issues continue to be popular with borrowers, who

India's century bond is excluded, average maturity took the opportunity of high market liquidity to

was only lOyears. The average for Latin Americawas secure lower coupons at longer maturities than

The average 13 years (11 years without Chile's century bond). last year (figure 5). Six convertible bonds were

maiturity of East Asia's average maturity was a little over 8 years, issued during the quarter, one by Poland and fivematurity followed by Eastern Europe at 5.5 years. by Asian countries. Floating rate notes retained a

bond issues small share of total issues, with East Asia con-

came to a FIGURE 3 Average maturities on internationalumber.bond issues, 1997Q I DOLLARISSUES DOMINATE ASIAAND IATINAME-

little over Yeors ICA. Dollar-denominated issues accounted for 89%

y ears of bond volume from Asia and 64% from Latinyears Chile _ 57 America (figure 6). The dollar and deutsche mark

Colombia 30 share of Latin American issues increased at the

India 20 expense of the lira and other currencies, primarilyThailand 5 because of big issues by Argentina, Brazil, and Mex-

Thailand _ _ 1ico. In Europe and Central Asia the share of dollar

Uruguoy 10 and deutsche mark bonds fell, although deutsche

Greece 10 mark bonds retained a 58% share. The share of dol-

Argentina - 9 lar bonds fell sharply as Russia issued in the deutsche

Philippines a mark sector, Hungary in yen, and Turkey in lira.

Mexico 9 Secondary market prices higher this

Brazil 8 quarter

Hungary 7~ DEBT PRICES POST STRONG GAINS IN JANUARYVenezuela 6 AND FEBRUARY, BUT DECLINE IN MARCH. Prices of

Venezuela 6

Turkey 6Turkey *6 FIGURE 4 Bond issues from developing

Russia m5 countries, by maturity

Oman US$ billions

5 74.6 Over IS years ULebanon - S . l _ I 1-15 years ElPanama *5 6-10 years ElPa and -5yearsU

Chinca

Indonesia DSn Lanka *3 20.2 19.6

Romania 3a

All _ 1996 1996Q4 1997QI

Source: Euromoney Bondware and World Bank. Source: Euromoney Bondware and World Bank.



virtually all Asian and Latin American bonds rose to some reports increased our estimate of syndi-

in January and February. The rise in US interest cated loans to developing countries in the fourth

rates contributed to a decline in secondary mar- quarter of 1996 to $36 billion (up from $18.4 bil-

ket prices in March. Overall, the average sec- lion reported in the previous issue of Financial

ondary market price of developing country debt Flows and the Developing Countries). Major revisions

rose 3% in the first quarter (figure 7). were made for all regions (table 2). But even this

DEMAND FOR DEBT INSTRUMENTS RISES much higher figure remains below the $41.8 bil-

SHARPLY FOR 1996. Partly as a result of the decline lion in syndicated loans recorded in the fourth Trading in localin yields available in better-established markets, quarter of 1996. debt instrumentstrading in local debt instruments of emerging

markets soared to a record high. Until recently, Loan conmmitments decline in first of emergingthe only liquid financial instruments available to quarter markets soaredforeign investors in most emerging markets were The preliminary estimate for loan volumes during

the Brady bonds. In 1996, however, the volume of the first quarter of 1997 is $20 billion (for trans- to a record hightrading in local instruments increased signifi- actions through mid-March). This is only 56% of

cantly. Still, Brady bonds remained the single the revised fourth-quarter estimate butjust below

most traded asset class, with a market share of the $21.5 billion borrowed during the first quar-

50.7% (down from 57.7% in 1995). New markets ter of 1996. Based on the strong seasonality shown

emerged (Slovenia), and the trading in several in loan commitments (the jump in the fourth-

Asian assets jumped. Transactions in Indonesian, quarter figures may reflect banks' efforts to close

Malaysian, and Thai debt, for example, totaled deals within the tax year and government efforts

roughly $75 billion, up from negligible amounts to close within the budget cycle), the first-quarter FIGURE 6

in 1995. Trading in Russian instruments figures suggest continuing strength in the loan Currencyincreased 162% (to $380 billion); in South markets. Private sector borrowers led East Asia to composition of bondAfrican instruments, 308% (to $170 billion). the highest share (one-third) of loan commit- issues, 1997Q IBrazilian assets remained the most commonly ments in the first quarter. Europe and Central East and South Asia

traded instruments, accounting for 27% of traded Asia was next with a 25% share and volumes ($4.6 billion)Yen

volume ($1,441 billion), closely followed by almost evenly distributed between the public and YeArgentine assets ($1,292 billion) and Mexican private sectors.

instruments ($946 billion).

Last year Algeria's commercial debt appreci- FIGURE 5 Bond issues from developingated 65% on the secondary market, sparked by the countries, by typeagreement with commercial banks to reschedule US$ millions Latin America

$3.2 billion of Algeria's $4.5 billion commercial 74.6 Floating * ($12.0 billion)$3.2 billion of Algeria's ~~~~~~~~~~~~~~~~~~~~~Otherdebt. (Only $1 billion is currently traded.) The Convertible I Lir omain tranche trades at 77% of face value with a Fixed rate Ye 9yield of 15%, and analysts see further upward 3%U

potential. Aided by rising oil prices, interest in DM 64%

Algerian traded loans rose in 1996 on the back of

a strong year for emerging-market debt.Europe and Central Asia($2.8 billion)

Commercial bank loans 20.2 19.6 US$

Fourth quarter loan commitments E _ _

revised upward YThe availability of comprehensive information for 1996 1996Q4 1997QI 15%

December 1996 and significant upward revisions Source: Euromoney Bondware and World Bank. Source: Euromoney Bondware and

World Bank

May 1997


East Asian private sector borrows $5 paying 62.5 basis points over LIBOR. By contrast,

billion PT Arthayasa Grahatama, a private corporation,

INDONESIA LEADS REGION. Indonesia, with $3.4 paid close to 250 basis points over LIBOR for $233

billion in syndicated loans, led East Asian borrow- million in 8-year funds to finance construction of

ers. Most of the country's borrowers were from the a hotel. Most loans were devoted to working capi-

private sector, although the government did tal and refinancing existing debts. The country's

receive a 8-year revolving credit of $500 million, longest maturity loan (10 years) went for project

finance (see page 16). About one-third of the

FiGJRE 7 Secondary market price index, April 1 993-March 1997 transactions were secured by guarantees.

Aprnl 1990 =1I 00 MALAYSIA IS SECOND LARGEST BORROWER. Syn-

dicated loans to Malaysia totaled $1.5 billion,

240-almost half of the- ---------------- 7---------------volume------------------------for project-- ------------------------------ ------ financethalffofftheevolumeeforrpro(seetfinanee(see

page 16). Two standby letter of credit facilities

,Nh were provided for general funding requirements.

200------------------ ----------------- ------ Of the general syndications the largest and the

21^//<\ t All debtNif r longest maturity loan went to Gelora Pasifik Sdn.180 ------ ----- ----- - --------- ---- ----------------- -- -------- Bhd. The almost 7-year $178 million deal

included a put option that could be exercised in

the fifth year.

PUBLIC SECTOR DOMINATES IN CHINA. Chinese

Brady bonds borrowers tapped the market for $1.2 billion, of

120 ----------------------------- ------------------------------ ---------------------------- --------------------- which more than 80% was from the public sector.

(China was responsible for almost all the

100 __ ______ _ __- nonsovereign public sector borrowing in the

region.) The longest maturity achieved by Chi-Source: World Bank. nese borrowers in the first quarter was 10 years, by

one of the public airlines (for the purchase of air-TABLE 2 Loan issues by type of borrower craft) and by the State Development Bank.

US$ millions 1996 1996 1996 1996 19971994 1995 1996 Ql Q2 Q3 Q4 QI LAND BORROWS IN LOCAL CURRENCY. Pri-

AlI developing countries 72,780 102,911 95,385 21,523 18,870 18,750 36,242 20,119 vate sector borrowing from Thailand brought the

Privote 32,110 51,075 61,850 12,170 13,010 10,987 25,682 12,942 total for the country to $0.6 billion. IndependentSub-Saharan Africa 1,022 2,606 3,921 as5 2,144 446 517 1,113 Power Producer, a private corporation, raised

East Asia and the Pacific 20,685 28,447 31,823 8,959 7,060 7,445 8,359 5,281SouthAsia 1,857 2,400 2,395 643 171 304 1,278 367 money in two 15-year tranches. One was dollar-

Europe and Central Asia 1,645 5,344 6,718 816 1,125 1,089 3,687 2,471 denominated ($176 million), and the other wasLatinAmerica 6,434 11,621 16,515 938 2,255 1,669 11,654 2,822 denominated in local currency ($115 million).

Middle East and North Afrca 468 657 477 0 255 35 187 888

Sovereign 10,604 7,284 4,347 1,123 678 9 1 5 1,631 SI81 Another big loan was from a private superstore

Sub-Saharan Africa 28 411 471 40 0 375 56 0 retailer, which borrowed $160 million for 5 years.East Asia and the Pacific 4,074 1,727 790 98 542 100 50 530 PEHLIPPINE FIRMS TAP MARKETS. Three private

South Asia 283 361 701 375 0 182 143 0Europe and Central Asia 2,585 1,666 1,009 60 1 36 108 704 0 sector companies from the Philippines tapped the

LatinAmerica 585 2,914 627 350 0 0 277 ISI international market, one arranging funds forMiddle East and North Africa 3,048 205 750 200 0 IS0 400 500

meeting upcoming payments and the others forOtherpubtic 30,066 44,552 29,188 8,230 5,182 6,848 8,928 5,996

Sub-Saharan Africa 31 1 2,649 1,333 440 185 349 359 40 anvestment in the communications sector.EastAsia and the Pacfic 14,568 18,077 8,072 2,479 1,741 1,767 2,085 1,106

South Asia 2,411 3,339 4,093 968 1,082 720 1,323 95 IEurope and Central Asia 6,692 6,759 7,533 2,845 994 2,374 1,320 2,739 South Asia borrows $1.3 billion i first

Latin America 4,838 5,660 7,486 937 1,079 1,627 3,842 1,161 quarterMiddle East and North Africa 1,246 8,067 671 561 100 10 0 0 INDIA IS LARGEST BORROWER IN REGION. IndiaNote: First quarter figures are as of March 25, 997.Source: Euromoney Loanware and World Bank. accounted for 85% of total commitments from the

X Financial Flows and the Developing Countries


region during the first quarter, with public sector ($872 million) loan to Rossijskoje A/O Gazprom,

borrowers taking three-fourths of India's share. for the purchase of gas recovery equipment. US

Funding objectives included promoting domestic Ex-Im Bank backed a $115 million 8-year loan to

capital markets and industrial production, refi- JSC Nizhnekamskneftekhim, arranged in two

nancing debt, acquiring capital assets, and meet- tranches at a cost of 150 basis points. Other loans

ing general working capital requirements. averaged about $40 million, with maturities of less

Shipping Corporation of India, the country's than a year.

largest shipping company, obtained funds for 11 POLAND HAS HANDFUL OF DEALS. Poland was Russianyears (double the average maturity from the coun- the second biggest borrower from the region with

try) at LIBOR plus 75 basis points. Industrial a total of $1.1 billion. The state railway company gDevelopment Bank of India, the principal finan- tapped the market to fund capital expenditures $1.2 billioncial institution serving industry, funded its general and the airline borrowed it to purchase aircraft. during the firstcapital requirements with a 7-year loan, paying 55 KAZAKSTAN BORROWS TO FINANCE CONSTRUC-

basis points over LIBOR. Tata Iron and Steel Co. TION. The government of Kazakstan raised $50 quarterLtd.'s $50 million loan was oversubscribed twice. million in 4-year funds at a cost of 325 basis points

The private corporation paid 86 basis points over over LIBOR. The money will be used to finance

LIBOR for 8-year funds. construction of government buildings, as part of

PAKISTAN IS ALSO PRESENT IN MARKET. Pakistan plans to move the country's capital. The steel com-

was the only other South Asian borrower in inter- pany Ispat Karmet JSC, whose creation involved

national markets during the first quarter, with syn- the second largest foreign investment in the

dications worth $0.2 billion. Apart from two project region to date, was in the markets for $90 million.

financing transactions (see page 17), the loans COUNTRIES BORROW FOR TELECOMMUNICA-

included a 2-year facility for trade finance taken by TIONS, ELECTRICrry. The major borrower from

the state oil company and a short-term facility to Hungarywasatelecommunications companyfund-

finance the working capital requirements of the ing general capital requirements. Slovenia's public

state telephone company. Both of these were guar- telephone company borrowed $120 million in

anteed by the State Bank of Pakistan. deutsche marks. Slovenia's other borrowers were

private companies. Slovak Telecom of the Slovak

Europe and Central Asia has largest Republic made its first entry into the international

number of borrowers markets with a $170 million 5-year loan paying a

BORROWING IS SPLIT BETWEEN PUBLIC AND PRI- spread of 40 basis points over LIBOR. The loan

VATE SECTORS. While the total volume of borrow- almost doubled in size because of oversubscription.

ing ($5.2 billion) from the region was equally split

between public and private borrowers, Croatia,

the Czech Republic, and Romania were repre- delopin composition ofr ~~~developing country bond issues,

sented only by the public sector. An $89 million 3- 1 997Q I

month bridge facility was put in place to cover an Energy/telecoml

earlier loan by Croatia. The government plans to Other utilities

refinance the bridge facility in the summer 4 8% Miningol/

through a bond offering. A public bank in the %5%

Czech Republic borrowed $150 million, and the Blnki.g

syndication was oversubscribed. Romania's public finance 18%

oil and gas corporation borrowed $200 million

under a revolving credit facility.

RuSSIA LEADS REGION. Russian borrowing

totaled $1.2 billion during the first quarter. The Note: "Other" includes utilties, agriculture, construction, transport, andother services.

country's largest transaction was a DM 1.5 billion Source: Euromoney Bondware and World Bank,

May 1997 X


Debuts by two other telecommunications groups action from the region was a $40 million loan with

from the Slovak Republic raised $220 million, and a 1-year maturity to a public oil and gas company

the state electricity company borrowed $111 mil- in C6te d'lvoire.

lion in two equal tranches of 7 and 5 years.

COMMERCIAL BANKS BORROW. Hansabank, a Terms on borrowing stable in firstprivate bank in Estonia, debuted in the markets quarterwith a DM 100 million ($61 million) 3-year loan. SPREADS ARE SAME AS LAST YEAR. Developing

Developing The cost was 95 basis points over LIBOR. Major countries' average cost of borrowing in the syndi-

countries' borrowers from Turkey (apart from project cations market was roughly unchanged in the firstfinance loans, discussed on page 16) were banks quarter, in contrast to the fall in spreads in the

caverage cost of that arranged funds for trade financing. bond market (figure 9). Countries paid an average

borrowing in the spread of 1%, and maturities averaged about 4 14Latin America borrows $4.1 billion years. Average termsvaried considerably byregion.

syndications CHILE, ARGENTINA, AND MEMCO BORROW In Latin America spreads fell 60 basis points dur-

market was ABOUT $1 BILLION EACH. Chile topped the list with ing the first quarter (figure 10). In Europe and

roUghly loan syndications worth $1.1 billion. Private banks Central Asia spreads fell for Hungary, Russia Slo-borrowed money for refinancing and onlending. vakia, and Turkey (which paid almost 125 basis

unchanged in The public sector telecommunications corpora- points less than last year). The average spread in

the first quarter tion and an industrial holding house also were East Asia was marginally increased by Thailand,present in the market. In a deal backed byJapan where spreads rose almost 40 basis points. In South

EXIM Bank, Argentina borrowed 18.5 billion yen Asia a 30-basis-point rise in spreads for Pakistan

($151 million) for infrastructure. Also, three pri- was offset by declines for India.

vate sector borrowers renewed or refinanced $0.7 MATURITIES SHORTEN. The average maturity

billion in existing debt. Two deals from Mexico, of syndicated loans in the first quarter declined by

both 3-year loans to fund general working capital about half a year to a little more than 4 years. Aver-

requirements, totaled close to $1 billion. age maturity was longest in the Middle East, partly

BRAZIL, COLOMBIA, AND PERU ARE ALSO IN because of above-average maturities on Indian

MARKET. Brazil borrowed $0.4 billion in three syn- and Pakistani syndications. Latin American bor-

dications. The government guaranteed a private rowers were able to push out their maturity, pro-

corporation's $171 million 13-year loan to finance file by a year over the previous year, to an average

the supply of trains for the Sao Paulo metro. of almost 5 years. The average maturity on Brazil-

Colombia accounted for close to $0.7 billion, in ian loans was 7 years, lower than for other coun-

four transactions. Chivor, the public electric util- tries in the region and a significant improvement

ity company, raised $400 million to purchase a over the 2-year average in 1996. Declines for

hydroelectric plant from the government. Both of Indonesia, the Philippines, and Thailand drove

the private corporation deals from the country the average maturity for East Asia down by over

were oversubscribed. Private companies from half a year. Maturities for South African borrow-

Peru secured $170 million for three years. ers were also down by almost a year.

CURRENCY PROFILE OF BORROWERS REMAINS

South Africa is major borrower from LARGELY UNCHANGED. The majority of loans dur-

Sub-Saharan Africa ing the first quarter continued to be denominated

South Africa borrowed $1.1 billion, primarily in in US dollars (figure 11). Yen-denominated loans

2-year funds obtained by private banks to refi- were from China, Malaysia, and Thailand, while

nance their general-purpose funds, thus giving a deutsche mark syndications went only to Eastern

variety of domestic borrowers indirect access to Europe. The majority of "other" currencies used

the international market. Almost all of these trans- were Ecu (used by Malaysia) and local currencies

actions were oversubscribed. The only other trans- (used by Poland).



FIGURE 9 Spreads on developing countries' Project financing eases m first quarterloan syndications, 1 997Q I ESTIMATE FOR 1996 RISES. The estimate of loanBasis points over benchmark syndications for project financing in developing

countries during 1996 was increased to $20 bil-

CEurope and 188 lion, up from the $16.6 billion reported in the

Latin Amenca 124 February issue of Financial Flows and the DevelopingCountries (table 3). Revisions were made to data

Fast Asio l _ l o l for all regions except Sub-Saharan Africa and the

Middle East and N. Afnca 75 Middle East and North Africa. The fourth-quarter

SouthAsia 75 estimate was increased from $3.3 billion to $7.2

Sub-Saharan _ billion, owing to strong activity in East Asia andAfca 40 Latin America toward the end of the year, which

ADll 113 was reported too late to be included in the Febru-

ary issue.

Kazakstan 325 FIRST QUARTER AcTivITy SLOWS. Our prelimi-

nary estimate of the volume of project finance com-Russia 323 mitments during the first quarter is $4.2 billion.

Peru - 300 This figure is comparable to the average for the first

Pakistan 193

FGURE I0 Decline in spreads in 1997QIIndonesia 160

Colombia 151 Basis points

Mexico ISO Argentina 147

Malaysia 138 Russia 133

Thailand - 130 Philippines 87Slovkia a75

Argentino 116 Hungary 70

Philippines 113 Brazd l_44

China Mexico 37Colombia 35

Turkey _ 26

Poland 85 India M 18

Saudi Arabia 83 South Afncal 13

C-te d'lvoire 7 Ce 1Note: Calculations based on US dollar-denominated syndications.

Bahrain 71 Source: Euromoney Loanware and World Bank.

India 64

FIGURE I C urrency composition ofTurkey 63 loan issues, 1 997Q I

Slovakia _ 47

Chile * 38 U%

Others 7%SouthAfrcoa 36 us

85% Czech. Rep. 30

Hungary 1*20

Note: Calculations based on US dollar-denominated syndications.Source: Euromoney Loanware and World Bank. Source: Euromoney Loanware and World Bank.

May 1997 E


three quarters oflastyear, although it reflects fewer be $650 million, with 30% of the financing to be

transactions. Of the total loans syndicated during contributed as equity by the project sponsors. The

the quarter, about a fifth were devoted to project third loan, to PT Radio Telephone Indonesia (a

finance. The private sector accounted for almost project company established for development of a

80% of all project-financing activity in the quarter. cellular network inJakarta), was divided into three

INFRASTRUCTURE SHARE DECLINES. Infrastruc- tranches totaling $197 million. A $75 million

ture's share in total project finance commitments tranche was guaranteed by US Ex-Im.

The average fell from 37% in the fourth quarter of 1996 to 23% Megasteel Sdn. Bhd. of Malaysia raised $520in the first quarter of 1997 and was generally million, in two tranches of 9 years each, for con-

maiturity of below last year's levels. Within infrastructure, the struction of a steel mill. Equity participation by the

project-financing power sector continued to attract the greatest project sponsors is about $240 million. A $360 mil-

deals reached share of funds, with heavy commitments during lion 8-year syndication for construction of a refin-the first quarter for India and Turkey. Telecom- ing subsidiary by Shell Refining Co. Bhd. was

almost 7.5 years munications attracted the second greatest volume oversubscribed.

during the first of infrastructure funds, with major deals from TURKEY IS SOLE PLAYER FROM EUROPE AND

Indonesia and South Africa. The water and CENTRAL ASIA. Turkey's Uni-Mar Power, a private

sewage sector was represented by a deal arranged utility corporation, raised $465 million for con-

for Colombia. struction of a power plant. Additional funds are

AVERAGE MATURrIy INCREASES. The average being provided by the German and Japanese

maturity of project-financing deals reached export credit agencies, and the sponsors are con-

almost 7.5 years during the first quarter, about a tributing $156 million in equity. Another deal

year longer than last year's average. This increase from Turkey involved a $40 million loan to

reflects some improvement in the market's per- finance gold mining.

ception of the quality of borrowers, as well as new BAHRmIN IS IN MARKET FROM MIDDLE EAST AND

entrants into the market. The average size of the NORTH AFuCA. Bahrain arranged $500 million

deals was almost double the average for the fourth for construction of a power and desalination

quarter and for 1996. plant. The two-tranche deal had maturities of 15

EASTAsIA MAINTAINS LARGEST SHARE. East Asia and 10 years, among the longest maturities in the

and the Pacific accounted for 43% of project- project finance market during the quarter.

finance commitments during the first quarter, OTHER REGIONS BORROW SMALL AMOUNTS.

although the volume fell from $4.4 billion in the Power Finance Corporation Ltd. of India, an

fourth quarter to $1.8 billion in the first. investment vehicle established as a conduit for

In China, Guangzhou Ethylene Co. Ltd. bor-

rowed $35 million in two tranches for construc- TABL 3 Project finance by region and sectortion of a $240 million petrochemical plant (the US$ mil//ons 996 996 1997

bulk of the finance is being secured fromJapanese Region

and Italian export credit guarantee agencies). A/I developing countries 20,484 7,233 4,215Sub-Saharan Africa 200 40 123

One tranche paid 120 basis points over 6-month East Asia and the Pacific 13,982 4,376 1,806

LIBOR for 5-year funding; the other paid 165 South Asia 2,173 724 148

basis points over LIBOR for 3 years. Europe and Central Asia 1,353 646 505Latin A merica and Caribbean 2,026 852 283

Indonesia accounted for three deals of above- Middle East and North Africa 750 595 1,350

average size. The first was increased from $150 mil- Sector

lion to $245 million because of oversubscription. Power 5,074 1,259 540Telecommunications 2,150 6 19 320

The second was a $450 million limited-recourse Transportation 427 0 0

arrangement for the Corridor Block Gas Project, Other infrastructure 1,509 803 100arrangement ~~~~~~~~~~~~~~~~~Noninfratructure 11,325 4,552 3,255

priced at 200 basis points over LIBOR for 10-year Note: First quarter figures are as of March 25, 1997.

funds. The total cost of the project is estimated to Source: Euromoney Loanware and World Bank.



World Bank and Asian Development Bank fund- (now considered a high-income country). France,

ing, raised 6-year funds at 50 basis points over Germany, the Netherlands, and the UK

LIBOR to finance the construction of a power pro- accounted for over 80% of the European funds

ject. The deal was increased to $75 million from invested in developing country projects during

an initial level of $65 million. India's largest 1996. By contrast, in the first quarter of the year

cement group, Associated Cement Co. Ltd., bor- European investment in developing countries was

rowed $55 million in 8-year funds. more evenly distributed among 10 countries.

The International Finance Corporation Developingarranged an $18 million facility for a private cor- Bond and loan markets differ in costs, countries haveporation in Pakistan. maturity of funds

The International Finance Corporation was DEVELOPING COUNTRES ARE SHITING TO greatly increasedalso present in Latin America, where it arranged BOND MARKETS. Developing countries have greatly their reliance on$33 million in financing and provided a quasi- increased their reliance on bond markets for

equity investment of $5 million for a private external finance over the past 2 years, and the rel- bond markets forArgentine oil and gas corporation. ative share of loan syndications has declined. external finance

Chile had the largest deal from Latin America. While the syndicated loan markets continue to over the pastCompania Contractual Minera Candelaria raised provide access to international capital to more

$150 million in a limited recourse loan in which developing countries than bond markets do, the 2 yearsEXIM Japan was involved. The copper produced number of new entrants and the volumes obtained

by the corporation would be purchased by a through the bond markets are increasing.

Japanese mining company over a 10-year period. BOND MARKETS' COSTS ARE HIGHER, MATURI-

Colombia's public utility company, Empresas TIES ARE LONGER. In the first quarter of this year

Publicas de Medellin, funded a power project the average maturity on dollar-denominated

through a $100 million 7-year loan paying 150 bond issues was about 11 years just over 9 years if

basis points over LIBOR. two 100-year bond issues from Chile and India are

From South Africa a private mobile telecom- excluded), while the average maturity of dollar-

munications company tapped the market for 5- denominated syndicated loans was a little over 4

year finance. years (figure 13). At the same time, developing

ASIANS AND EUROPEANS ARE MAJOR SOURCES

OF PROJECT FINANCE. Asian and European .FIGURE 131 Relative maturities and cost of borrowing in bond! and loan markets

investors account for the bulk of project financing I

channeled to developing countries (figure 12). Average spread paid on bonds

Japan has typically provided half of the invest- over loans (basispoints)

ments from Asia. Funds also have come from Argentina:

other countries in the region, particularly from 250 --------------------

Indonesia, Malaysia, and the Republic of Korea 200 ----i-Mexico I dia--

FIGURE 2 Project finance investor profile for i5o --------------------r--------------------r------------------ -, ---------------- -- ,

developing countries, 1 997Q I Indonesia counties

Middle East US/Canada . . Chile21% 13% *Poland iiE

i PhilippinesColombia

0 --------------- U -------- ----Europe l China Thailand

ia42% ~~ ~ ~~0 5 IC0 1 5 20 25 30F Additional tenure in the bond market over the loan market (years)

Note: Spreads based on US dollar-denominated loans.Source: Euromoney Loanware and World Bank. Source: World Bank based on Euromoney Bondware and Euromoney Loanware.

May 1997X


TABLE 4Sovereign foreign country borrowers paid about 130 basis points year; table 4) reflect the government's commit-currency debt more in the bond market than in the syndicated ment to sound economic policies, which reduced

Long-term rtings, os of loan market. This differential varied by region. inflation to 3% in 1996 from 1,486% in 1993,March3, 1997

Moody's S&P For the major Latin borrowers (Argentina, Brazil, increased GDP growth to 6% in 1996 (GDP had

Investment grode and Mexico) the average spread in the bond mar- declined in 1993), and lowered the ratio of exter-Chile Baa I A-/AA* ket was more than 200 basis points higher than in nal debt to exports. The analysts also feel that theChina A3 BBB2

Colombia Baa3 BBB-/ the loan market, and maturities in the bond mar- improved political situation in the Balkans has

Croatia Baa3 BBB-* ket exceeded those in the loan market by almost brightened prospects for growth, partly by reviv-A+.2 7 years. By contrast, some East Asian borrowers ing tourism, an important source of foreign

Cyprus A2 AA-/ paid only 100 basis points more in the bond mar- exchange. According to Moody's, Croatia's rating

Czech Republic Baal A' ket, but their bond market maturities exceeded is constrained because of uncertainty about theGreece Baa3 BBB-'

rndia e Baa3 BB+/ those in the loan market by more than 7 years. government's ability to maintain fiscal balance in

BBB+*2 the face of pressures to invest more in infrastruc-Indonesia Baa3 BBB/ *

A+* ! Market creditworthiness ture and social sectors.

Malaysia Al A+/ S&P ASSIGNS A B+ CREDIT RATING TO THEAA+*

Malta A2 A+/ Sovereign creditworthiness ratings DOMINICAN REPuBLiC IN FEBRUARY. The analystsAA+*Panama BaalI BB+*, highest in a decade were positive about the country's medium-term

Poland Baa3 BBB-/ Institutional Investor's latest semiannual survey of prospects. The public sector debt burden (32% of

Slovak Republic Baa3 BBB-/A* country credit ratings continues to report improve- GDP in 1996) compares favorably with that ofSlovenia A3 A/AA' ments in the market's perception of developing- other B-rated sovereigns. The Dominican Repub-South Africa Baa3 BB+/

BBB+*2 country performance. On a scale of zero to 100, lic's foreign exchange earnings are rising as a

Thailand A2 A/A*] with 100 representing countries with the smallest result of the success of the free trade zonesTunisia Baa3 n.a.

risk of default, Eastern Europe's average rating (underpinned by low wages) and a growingBelow investment grodeArgentina B I BB-/ improved 1.6 points to 29.2. The largest increases tourism sector; foreign exchange earnings should

BBB-'1 wereregisteredbyPoland (3.9),Croatia (3.3),and continue rising with the planned abolition of theBarbados Ba2 n.a.Brazil BI B+/BB.2 Hungary (2.9). Latin America's rating rose an dual exchange rate system and the lowering of

Egypt BA2 BBB-/ average 0.8 points, to 29.9. With Peru up 2 points, trade barriers. The rating is constrained by the

Hungary Ba I BBB-/ Venezuela up 1.1, and Argentina up 1 point, this serious level of tax evasion (it is estimated that the

Jordan Ba3 BB-* regional rating is the highest since 1982. The Asia- government receives only about 20% of incomeBBB-2I Pacific region had the only regional rating decline, taxes due, and a number of public enterprises are

Kazakstan Ba3 BB-'Latvia na. BBB/ falling 0.3 points to 48.6. The Philippines' rating substantially in arrears) and concerns about the

A * rose 2 points, but Thailand's fell 2.1 points (the weakjudicial system.Moldova Ba2 n.a.Mexico Ba2 BB/ largest decline in the survey) and Pakistan's fell S&P ASSIGNS A BBB RATING TO LATVIA.

BBB+* 1.5 points. The Middle Eastern region posted a According to the S&P analysts, Latvia's ratingPakistan B2 B+'Paraguay n.a. BB-/ negligible 0.3 point rise to 42.4. Lebanon gained reflects the government's success in instituting

BBB 1a 4.3 points, the largest increase by any country. market-based reforms, its level of commitment toPhilippines Ba2 BB/

BBB+*2 Egypt was up 1.6. points. Africa showed a modest reform (in particular to privatization), and the

Romania Ba3 BB-/ improvement. The largest gain in the region was low government debt burden (18% of GDP).

Russia Ba2 BB-' Sudan (up 2.9 points). Uganda posted an increase Creditworthiness is constrained by low, albeit ris-Trinidad BalI BB+/and Tobago BBB+ -

2 of 1.6 points and Swaziland, 1.4 points. ing, income levels (per capita GDP of $2,000 inTurkey B I B 1996); the uncertain competitiveness of yet-to-beUruguay Bal BB+/

BBB* Croatia, Dominican Republic, Latvia, privatized large enterprises; and concerns about

Venezuela Ba2 B2 Moldova, and Panama receive first likely increases in unemployment as a result of pri-

* The first rating applies to foreign credit ratings vatizationcurrency debt and the second todomestic currency debt. CROATIA IS ASSIGNED A BBB- CREDIT RATING MOODY'S ASSIGNS MOLDOVA A BA2 CREDITn.a. Not app icable.I . Stable outlook. BY S&P AND A BAA3 BY MOODY'S. According to the RATING IN JANUARY. Although inflation in2. Positive outlook.3. Negative outlook. agencies, the ratings (assigned in January of this Moldova has declined significantly from the 329%



rate in 1994, analysts attributed the below-invest- rated sovereigns. The structural reform program,

ment grade rating to continued inflation (23% in including privatization and trade liberalization, is

1996), which is higher than in a number of other progressing well. The ratings are constrained,

countries in the region. GDP growth has analysts stated, by the country's low per capita

improved from -3% in 1995 to 2% in 1996 and is income (about $1,200 expected in 1997), moder-

projected to reach 4% this year. ately high government debt, and low (albeit

PANAMA IS ASSIGNED A BB+ RATING BY S&P AND improving) levels of savings and investment.

A BAl BY MOODY'S. Panama's ratings were one

notch below investment grade. The analysts stated Lebanon is assigned BB- rating bythat the high level of public sector debt kept them Moody's, Bi by S&Pfrom awarding a higher rating. At 57% of GDP, the In February Moody's assigned a BB- rating and

public sectordebtburden is substantiallyabove the S&P a Bi rating to Lebanon. S&P's rating puts

average for sovereigns rated BB+. On the other Lebanon on the same footing as Russia. Analysts

hand, analysts felt that Panama's dollarized econ- believe Lebanon's ratings are constrained by its

omy should continue to have low inflation (1.3% political vulnerability and large debt burden (at

in 1996). Economic reforms-including the priva- $2.7 billion external debt is 20% of GDP, and the

tization of public enterprises, trade liberalization, government's domestic debt is $8.5 billion). On

and the dismantling of extensive price controls- the positive side, analysts noted Lebanon's strong

are deepening. and entrepreneurial private sector and its excel-

lent history of debt repayment.

Egypt is assigned BBB- rating by S&PS&P assigned Egypt an investment-grade rating of Moody's downgrades TurkeyBBB-, indicating a low risk of default. According In March Moody's downgraded Turkey's foreign-

to analysts, the rating reflects an improving fiscal denominated sovereign debt from Ba3 to B1. Ana-

policy environment and very strong external liq- lysts cited the economy's weak fiscal position,

uidity, with foreign reserves equivalent to $19 bil- inflation of 81%, and political uncertainties that

lion (nearly a year's worth of imports) and may make it difficult to carry out essential eco-

external debt service the lowest among similarly nomic reforms.

Emerging stock markets fund managers plan to triple their investments in Most developingemerging markets by the year 2000. country stock

Outlook is favorable for emergingmarkets IFC's investable composite index (IFCI) markets postedA number of analysts see a favorable outlook for rises 9% in the first quarter significantemerging markets. One view is that emerging Most developing country stock markets posted sig- increases inmarkets tend to be a late-cycle investment as bull nificant increases in January and February, then

markets in industrial countries cool, so that if the declined in March on the heels of a drop in the US January andUS market slows in 1997, investment in emerging stock market. Although March was not a good February, thenmarkets may pick up. Many emerging markets are month for markets across the globe, the declines

also considered to be undervalued (as measured were generally not severe. The IFCI's Asia index declined in Marchby price to earnings ratios), and economic and rose only 1% in the first quarter. Almost all East on the heels of acorporate earnings in many of these markets are Asian markets (except Malaysia) posted declines, drp i th Sexpected to continue growing. Also, a recent but most South Asian markets rose. Thailand posted

OECD study found that international pension the greatest decline in all the emerging markets stock market

May 1997 K


(16%), while Pakistan achieved the highest gain in with no central depository system.) The Philip-

Asia-21% for the quarter. The IFCI's index for pines Securities and Exchange Commission is

Europe, the Middle East, and Africa posted a dou- expected to improve access to the market for for-

ble-digit increase of 19%; indices rose 54% for eign investors by approving a series of derivatives

Turkey, 38% for Greece, and 21% for Hungary. based on the movement in A shares. Currently, A

The Latin American index was up 15%. Almost all shares can be purchased only by local investors;

countries in the region posted high returns, except foreigners are restricted to trading in B shares,

Venezuela (a 3% decline). Colombia achieved an which generally carry a premium. Investing in the

increase of 21%, the highest return in the region. derivatives would allow foreign investors to cap-

ture the return on A shares. Expectations of this

Asian markets show varied returns policy change have already reduced the premium

THE CHINESE STOCK MARKET FALLS 1%. The on B shares over A shares from 100% to 65%.

market fell in reaction to the death of China's INDIAN STOCK MARKET RISES 7%. India's stock

leader Deng Xiaoping, concern about weak prof- market rose despite political uncertainty. Analysts

its, and the announcement by some US pension were pleasantly surprised by the government's

funds that they would not invest in the $3 billion budget, with its host of market-friendly measures

foreign-currency stock markets in Shanghai and such as ending the double taxation of dividends,

Shenzhen because they exhibited less trans- allowing share buybacks, and raising the ceiling

parency and liquidity than other markets in Asia. on foreign institutional investment in Indian com-

THE PHILIPPINE MARKET IS ALSO DOWN 1%. But panies from 24% to 30%. Analysts also expect that

analysts cite improvements in infrastructure and corporate earnings growth in India will be among

regulation that may boost the market in the the highest in Asian markets, while at 11.1 the

future. In January the Philippine stock exchange price-earnings (P/E) ratio is low compared with

launched a central depository system, which may 14.3 in the Philippines and 17 in Malaysia.

increase investor confidence and attract new PAKISTAN'S MARKET RECORDS A 21% INCREASE.

funds by scrapping paper-based trading and Investors reacted positively to the reelection of

reducing transaction costs. (Currently some Nawaz Sharif as Pakistan's prime minister. Many

investment funds are reluctant to enter markets analysts believed that most stocks had bottomed

out so that it was a good time to buy.

THAILAND'S STOCK MARKET DROPS 16%. TheFIGURE 4 IFC's investable composite index, by region decline is the highest percentage decline for the

July 1994-March 1997quarter. The baht fell to its lowest level in 10 years

l 40 . _~~~~~~ against the US dollar (and speculation about afur-July 1994=100 / Europe, theMiddle Ether devaluation continues), the trade deficitJuly /9400 4 %. Europe, the Middle East,! I

G and North Africa g remains large, and both the construction and realI:~~~~~~~~~~~~~~~~~4

120 ----- <C---------------------- +v----/~~to------- ---- -- ---------- estate sectors face a heavy burden of dollar-denominated debts and rising interest rates (Som-

t - prasang Land, a major real estate company,100 A i t -------------------- -- --- defaulted on its eurobonds).

Elsewhere in the region, the Sri Lankan stock

\ All emerging maretsmarket registered an increase of 5% for the quar-

80 ---------------------- -------------------------------- ------------- ter, while Indonesia's market fell 2%.

Europe, Middle East, and North Africa

60 _i_ markets register highest regional gains-~ Turkey's stock exchange rises 54% for the quarter.

Source: International Finance Corporation. Investors expressed confidence that the govern-

m Financial Flows and the Developing Countries

* Equity portfolio and foreign direct investment

ment is committed to privatization and have been become a regional institution linking investors in

encouraged by the declining budget deficit, lower seven member economies of the West African Eco-

real interest rates, and the constitutional court's nomic and Monetary Union. Stock exchanges were

decision that the government could proceed with established in Mauritius, Ghana, Botswana,the sale of Turk Telekom, the public telephone Swaziland, and Namibia in the early 1990s. These

company. But analysts remain concerned that the markets are still small and relatively illiquid. Priva-

government has not tackled the structural prob- tization, a key factor in encouraging stock market

lems underlying the large budget deficit. development, has not had a major impact on The stockMeanwhile, Greece's stock market registered African stock markets for a number of reasons. The market rose

an increase of 35%, reflecting optimism about pace of privatization has been slow in some coun-

falling interest rates, expectations of reduced tries; many privatized companies have been small 22% in Brazilinflation (from 7.5% in 1996 to 4.5% in 1997), and were sold en bloc to private investors. Govern- in the firstand rising prospects for Greece's entry into the ments have sold some large enterprises (such as CI-

European monetary union. Telecom in C6te d'lvoire, Kenya Airways, and quarterHungary's market registered an increase of Zambian Consolidated Copper Mines) to foreign

21% for the quarter. Analysts remain confident partners rather then disperse ownership among

about the country's economic reforms, as privati- many private investors. So only a fraction of the for-

zation and the restructuring of public enterprises merly state-owned assets have been made available

have resulted in higher-than-expected corporate on local stock exchanges. But some analysts feel

earnings. that the more ambitious privatization programs

Poland's stock market increased 5 % in the first now under way in some countries may ultimately

quarter, boosted by a large inflow of foreign finds encourage local stock markets.

and a positive outlook for the country's develop-

ment. Meanwhile, Jordan registered negligible Most Latin American markets recordmovement (-0.21%), and the Czech Republic's double-digit increases

stock market fell 3% for the quarter. The stock market rose 22% in Brazil in the first

Elsewhere, the Bucharest Stock Exchange in quarter. After a rocky 1995 and a stable 1996, ana-

Romania rose 30% in the first quarter. Analysts lysts believe that investor confidence is high in

noted concerns about slow growth, double-digit 1997. The prospects for large-scale privatization

inflation, and high unemployment but felt that may have increased with congressional approval

the market was buoyed by the change in govern- of a constitutional amendment that would allow

ment, the sharp depreciation of the leu, and the President Fernando Henrique Cardoso to run for

progress made in the mass privatization program. a second consecutive term. Some analysts also

With low interest rates, declining inflation, expect that the government will soon implement

and expectations of good agricultural output, the policies to overhaul the pension system, to stream-

Zimbabwe stock market registered an increase of line private and corporate taxation, and to end

23%. Analysts viewed the strong rand and a pro- guarantees of lifetime jobs for civil servants.

market government budget as aiding the bullish The Chilean stock market posted a 13% rise in

South African market, where the IFC's index rose the first quarter, after a lackluster performance

14% for the quarter. last year. Analysts feel that rumors that tight mon-

etary policies might be relaxed (the government

Stock markets in Sub-Saharan Africa are faces congressional elections in December)

small but growing encouraged the market and that stock prices

Fourteen Sub-Saharan countries have stock remain low. The average P/E ratio is down to 13,

exchanges. Those in Kenya, Nigeria, South Africa, compared with almost 18 in 1995.

and Zimbabwe are relatively long-established. The Mexico's stock market is up 10% this quarter.

C6te d'lvoire bourse, which dates to 1976, has Investor confidence in Mexico remains high as the

May 1997


country's economic situation has stabilized. countries fell 60% to $2.8 billion in the first quar-

Investors are seeking alternatives to what some ter (figure 15). In part, this drop reflects the sea-

analysts view as an overpriced US equity market sonal high level of fourth-quarter issues, but issues

(Mexico's P/E ratio is 14.5). Also, Mexico's pre- in the first quarter were also below the $6.6 billion

payment of the $17 billion bridge loan from the recorded in the first quarter of 1996. The most

US has reinforced the country's credibility. But active issuers were from East and South Asia,

uncertainty about the outcome of Mexico's federal accounting for $2.4 billion or 85% of total issues.

Increased elections has slowed investment in recent months. INDIA HAS LARGEST ISSUE. The sale of Videsh

investor Argentina's stock market registered a 7% rise Sanchar Nigam (VSNL), India's sole provider ofin the first quarter. The economy is expected to international telecommunications, raised $527

confidence in grow 5% in 1997, compared with 3.5% last year, million. This was the country's first offering in

emerging market and some analysts expect that S&P will upgrade global depository receipts (GDR) by a state-runArgentina's sovereign debt rating. company in the infrastructure sector and India's

issues has The Colombian stock exchange rose 21% for largest international equity issue to date. The

propelled trading the quarter, fueled by low interest rates, higher- strong demand for the paper should boost the

in depository than-expected corporate earnings, and high GDP domestic share market and the government's pro-growth. The market also reacted well to proposed gram of partial privatization of state-controlled

receipts linked changes in tax policy that would provide some tax companies such as VSNL. The company will also

to shares in exemption for the most actively traded stocks. have the right to exercise a greenshoe option toPeru's market registered an increase of 18%. raise a further $80 million. The government is

developing The increase reflects the completion of the Brady planning a succession of similar issues over the

country markets agreement to restructure commercial bank debt. next 12 months to raise $1.2 billion.

The market also reacted positively to the news of CHINA LEADS ISSUES IN THE FIRST QUARTER.

higher export earnings from increased prices for China raised close to $1 billion this quarter. Access

zinc, lead, and tin. to China's infrastructure sector was made possible

Venezuela was the only market in the region by Shenzhen Expressway (one of the six toll road

that declined (3%), mainly because of labor companies planning to raise capital this year).

unrest. The company raised $180 million in an initial

offering. Meanwhile, China Eastern Airlines

New equitiesFIGURE 5 International equity issues,

Issuance of depository receipts on rise by regionUS$ millions

Increased investor confidence in emerging market

issues has propelled trading in depository receipts Latin America

linked to shares in developing country markets. Asia

Since 1990 the number of shares traded in all 10.8

depository receipts has increased 30% annually

(22% in dollar terms). Lastyear 52% of issuers were

from emerging markets (up from 40% in 1995). 6.9

They accounted for 50% of the total amount raised

(up from 20%). The most active issuing markets for mdepository receipts were Brazil, Mexico, and South 2.8

Africa (14 each), India (13), and Russia (11). jNew equity issues fal 1995 1996 1996Q4 i997Q1

EQU1TY ISSUES DOWN FROM FOURTH QUARTER. Note: Equity fgures incuce domestic tranches.

The volume of new equity issues from developing Source: Euromoney Bondware and World Bank.


* Equity portfolio and foreign direct investment

raised $196 million at $18 a share. Although it is American depository receipts in the global mar-

China's most profitable airline, the debut of the ket. Meanwhile, Grupo Minsa, Mexico's second

new issues was modest. Analysts were concerned largest corn flour producer, raised $50 million at

about the high price, the company's debt burden, $14 a share.

the sharp competition on international routes,

and the heavily regulated environment in which New mutual funds launchedthe airline operates. On the up side, demand for NEw FUND TO TARGET ASIA. The insurance

the offering by Beijing Datang, the first Chinese group AXA-UAiP National Mutual launched a

state-owned enterprise to secure a listing on the $500 million mutual fund in Beijing. About 70%

London Stock Exchange, was high. The company of the capital is to be invested in high-growth

issued paper worth $466 million at $2.52 a share, industries in China that produce basic consumer

which puts the stock at a P/E ratio of 12. and industrial products; the remainder will be

INDONESIA ISSUER RAISES $32 MILLION. In invested elsewhere in Asia.

Indonesia, Mulia Land, one of the largest prop- FIRST PRIVATE INVESTMENT FUND IS ESTAB-

erty holdings groups, raised $32 million, of which LISHED FOR BALxANS. The $100 million S-year

60% was placed in Asia, 30% in Europe, and 10% closed-end fund managed by Regent Pacific

in the US. Putra Surya Multidana, a consumer Group, will invest in bonds and equities, concen-

finance group with a total market capitalization of trating initially on Bulgaria, Croatia, Romania,

$1 billion, raised $226 million. and Slovenia. Analysts believe the Balkans will

PHILIPPINES BANK RAISES $267 MILLION. The attract significant foreign investment, as many

issues from the Equitable Bank of the Philippines countries are now embarking on privatization pro-

attracted substantial interest in the domestic mar- grams and market reform.

ket, and the international tranche (50% of the STOCK EXCHANGE MUTUAL FUND IS ESTAB- TABLE 6

total) was oversubscribed twentyfold. Reynolds LISHED IN INDIA. The first mutual fund to track an Developing countryPhilippines raised $41 million this quarter. index of the National Stock Exchange in India, and prem icium ns

SLOVENIA ISSUES MAIDEN INTERNATIONAL now the most active bourse on the subcontinent, Percentage difference between net

ESQUITY ISSUE. The price of the first international has been launched after raising an initial $30 mil- asset volue and share price

equity issue out of Slovenia more than doubled as lion. The London-listed, open-end India Access Discounts

investors ordered more than 25 times the amount Fund will be managed by Unit Trust of India, the and premiums

offered. The GDR issued by SKB Banka, Slovenia's Largest discountsShanghai Growth

second largest bank, raised $24.7 million. TABLE S Developing countries' Investment Ltd. -43.00

A GDR issue from Egypt's privatized alcohol best-performing closed-end jupiter Internautinalequity~ funds Green Inv. Trust plc

and soft drinks group, Al-Ahram Beverages, raised e i u (ordinary shares) -42.42$87 million. Turkey raised $5 million through Percent Number Average return Jupiter European Inv.$87 mililon. Turkey ralsed $5 mllh through Market of funds March 1997 Trust plc

new issuances. India 13 1.53 (ordinary shares) -40.03

Poland remained active, raising $55 million. A Africa 9 0.74 Siam City Fund -33.54litte ovr amllio shaeswllbeplacd-wih iner-Argentina 2 -0.09 Vietnam Fund Ltd. -33.35little over a million shares will be placedxvtith inter- Russia 12 -0.60 Largest premiums

national investors, while another 300,000 will be Emerging markets 21 -1.60 Argentine Investment

aimed at retail investors. Brazil 3 -1.84 Company 36.11Latin America 17 -1.92 Henderson Eurotrust

SUB-SAHARAN AFRICA HAS ONE ISSUE. Zim- Thailand 31 -1.95 plc (zero dividendbabwe was the only African country to issue paper Emerging Europe 8 - I .97 preferred shares) 35.05

Chile 5 -2.32 Jupiter European Inv.this quarter. NMBZ Holdings placed a total of $30 Vietnam 5 -2.34 Trust plc (zero dividend

million at $23.30 a share. China 10 -2.40 preferred shares) 32.09Mexico 3 -2.86 Thai Fund Inc. 16.68

LATIN AmERICA HAS FEW ISSUES. Argentina and Philippines 3 4.05 Dynamic Eastem

Mexico provided the only new equity issues from Czech Republic 3 -4.72 One Fund 16.58Latin Americaduring the first quarter. Cresud, an Indonesia 9 5.65 Note: As of March 31, 1997.

Latin America during the first quarter. Cresud, aniTurkey 2 -7.93 Source: Lipper Internatonal Closed-Argentine agribusiness firm, raised $63 million in Source Lipper Intemational Cosed-End Funds Service. End Funds Service.

May 1997 w


country's largest fund manager, together with the ration rights in 15 blocks in eastern and central

UK insurance group Commercial Union. Bangladesh.

CUBAN GROWTH FUND IS ESTABLISHED. Ecoma- TELECOMMUNICATIONS CONTRACTS ARE

trix, the Bahamas-based investment company, has APPROVED. Vietnam has approved (in principle)

established a fund to invest in Canadian compa- four contracts worth $1.3 billion to install telecom-

nies that are based in, or do business with, Cuba. munication land lines in Hanoi and Ho Chi Minh

Institutional investors have already committed City and to increase the number of telephones

A survey of 308 $37 million to this fund. from 1.5 per 100 people to 5 per 100 people by

Fortune 100)0 REAL ESTATE FUND IS LAUNCHBD IN POLAND. 2000. Vietnam's telecommunication plans willPioneer, the US mutual fund management group, depend heavily on foreign investment.

comphanies finds has set up Poland's first real estate investment PLANS ARE ANNOUNCED FOR INDUSTRIAL GAS

that 877% of fund. The $60 million fund aims at office, retail, INVESTMENT. BOC, the world's second largest pro-and warehousing projects. Warsaw currently has ducer of industrial gases, announced plans to

potential direct commercial real estate projects worth $400 mil- invest $113 million in Indonesia to provide elec-

investors express lion in progress. tricity and steam and to build an air separationplant to produce oxygen for a new copper smeltergrowing Foreign direct investment and refineries.

confidence in and privatizationLatin America Investment prospects improve for Latin

Asian econonies continue efforts to America and the Caribbeanas a destination attract foreign investors SURVEY HIGHLIGHTS INCREASED CONFIDENCE.

for investment THAHLAND APPROVES FOREIGN INVESTMENT According to a survey of 308 Fortune 1000 com-

LAW. The law opens some service and manufac- panies commissioned by the Bank of Boston, 87%

turing sectors in Thailand to direct investment by of potential direct investors express growing con-

foreign firms, although investment in some areas fidence in Latin America as a destination for

(such as accounting, architecture, and real estate) investment. Most still see Mexico as the most

remains restricted. Egana International, a Hong promising country in which to invest, followed by

Kong-listed watch maker, has already announced Brazil, Argentina, and Chile.

plans to invest in Thai jewelry firms. PROSPECTS IMPROVE FOR FLOWS TO LATIN

INDIA RELAXES INVESTMENT RESTRICTIONS. AMERICA. Projections by the Institute for Intema-

The government has expanded the range of tional Finance show direct foreign investment in

industries in which investments can be made Latin American countries rising from $29.6 billion

without prior approval. As a result New Holland, in 1996 to $33 billion in 1997. Brazil is expected to

the world's second largest maker of tractors, receive the largestamount ($12.9 billion),followed

plans to invest in the production of tractors for by Mexico ($8 bilhon), Colombia ($2.8 billion),

both export and domestic markets. At the same Chile ($1.6 billion), and Argentina ($1.3 billion).

time, investors such as Siemens, the German INVESTMENT PLANS ARE ANNOUNCED. There

power and telecommunication group, have are other signs of growing confidence in the Latin

announced plans to cut back investments in American economies. Aetna, the US health and

India, citing lower-than-expected growth in life insurance company, agreed to invest $300 mil-

demand because of a slowdown in industrial activ- lion in a joint venture with Sul America Seguros

ity and continued delays in development of the (Brazil's largest insurance company) to expand

telecommunications sector. low-cost health care. Spain's Banco Santander

BANGLADESH NVITES BIDS FOR GAS EXPLO- announced plans to invest up to $220 million over

RATION RIGHTS. The government of Bangladesh the next three years in Brazil's Banco Geral do

has invited dozens of gas industry giants from Comercio, making it the largest foreign-con-

Europe, Japan, and the US to bid for gas explo- trolled bank in Brazil.

FinancialFlows and the Developing Countries


A group of North American financiers, includ- vatization deal so far. The auction of a 40-50%

ing Chase Manhattan Bank and National Bank of stake in the company should raise about $6 billion;

Canada, announced plans to invest $350 million the remaining shares will be sold to employees and

in a joint venture in Chile to form a Latin Ameri- to the general public through a share offering. The

can financial services conglomerate. central government will retain a 5-year golden

Elsewhere, Amoco of the US announced plans share to pre-empt any change of ownership.

to invest $1.2 billion in liquefied gas, oil pipelines, A Canadian company bought a 50% stake in

and other infrastructure in Trinidad and Tobago. Guyana Electricity Corporation for $22 million, The World Bank'sThe country expects investments of over $3 billion outbidding rival offers from companies in the US Multilateralin oil, gas, and petrochemicals over the next three and UK (table 7).

years. The Guatemalan government approved legisla- Investmenttion for the privatization of state-owned businesses. Guarantee

World Bank's MIGA supports creation Potential sell-offs include the telecommunications

of investment information exchange company, power utilities, ports, airports, and Agency isThe World Bank's Multilateral Investment Guar- railways. backing theantee Agency (MIGA) is backing the creation of The second wave of privatization in the Philip- creation of anan information exchange for infrastructure pines has come under criticism in recent months.

investment in Latin America, a concept that is Citing a constitutional ruling on national patri- informationlikely to be extended to Africa, Asia, and Eastern mony that prohibits foreign companies from win- exchange forEurope. Using Internet technology, the exchange ning local contracts, the courts suspended two

will carry project listings, news reports, messaging 25-year concessions (valued at $6.6 billion), which infrastructureand conference facilities, and information about the government had awarded as part of the priva- investment inbusiness conditions. Already 26 private and pub- tization of the Manila water system. Under the Latin Americalic sector companies have agreed to become original contracts, two consortia (comprising local

founding members of the exchange. and foreign firms) had won the right to operate,

but not own, sections of the city's water system. The

Privatization programs continue firms were to invest a combined $7 billion for

The Brazilian government approved a bill to end upgrading and modernization. In another sale,

Petrobras's 40-year monopoly in the oil and gas the bid for a majority stake (worth $30 million) in

industry. A decision on whether to privatize the Manila Hotel was awarded to a local hotel despite

company has notyet been made, however. The sale a higher bid offered by a foreign consortium.

of Companhia Vale do Rio Doce (CVRD) at the A joint venture between a Malaysian firm and

end of April is expected to be Brazil's largest pri- an Indonesian counterpart was awarded a 50-year

TABLE 7 Selected privatization deals, January-March 1997Equity Amount

Country Compony Sector shore (US$ mdl.) Method of sale Purchoser

Albania Elbasan Cement Cement 70 4.3 Auction ForeignAlbania Petrolimpex Petroleum 51 1.8 Auction ForeignChina China Eastern Airlines Transport - 184.2 Public offer Foreign

Cote d'lvoire Cl-Telecom Telecom SI 193.0 Direct sale ForeignEgypt El-Ahram Beverages Co. Brewery 70 78.0 GDR Foreign

Ghana Social Security Bank Banking 40 16.6 Direct sale ForeignGhana Ghana Telecom Telecom 30 38.0 Direct sale ForeignGuinea Sotelgui Telecom 60 45.0 Direct sale ForeignGuyana Guyana Electricity Corp. Power 50 22.0 Direct sale Foreign

India VSNL Telecom - 526.6 GDR Foreign/domesticPoland Bank Gdanski Banking 32 83.4 Direct sale Foreign

South Africa Telekom Telecom 30 1,260.0 Direct sale ForeignUganda Stanbic Bank Banking 49 6.8 Direct sale Foreign

- Not available.Source: Published sources, including Euromoney Bondware.

May 1997 L


concession to collect and dispose of solid waste, by the European Bank for Reconstruction and

recycle raw materials, and improve the sewerage Development and a 20% stake held by the treasury.

system inJakarta. In Kazakstan a fresh tender for the sale of a

China Eastern carried out the first public listing 40% stake in Kazaktelecom was announced after

of a Chinese airline, and VSNL, the Indian telecom- a previous bid submitted by Deutsche Telekom in

munications firm, was sold through a GDR issue. 1996 fell through over regulatory issues.

In Turkey, the government secured court The largest privatization to date in Sub-

approval for the sale of Turk Telecom, and it plans Saharan Africa took place when a 30% stake in

to sell up to 34% of the company for over $3 billion South Africa Telekom was sold to a consortium

bythe end of 1997. The statewill retain 51% of the consisting of Malaysian Telekom (12%) and the

remaining shares, and employees will receive 15%. US firm SBC International (18%) for $1.26 bil-

Also, three small banks were bought by local lion.The companywillretain $1 billion of the sale

investors for a combined total of $320 million. proceeds to finance its expansion program.

The government of Egypt reduced its stake in Telekom Malaysia also purchased a 30% stake

Eastern Tobacco Company by 14% through a sec- in Ghana Telecom for $38 million, together with

ondary sale of shares. The GDR offering for Al- a 60% stake for $45 million in Sotelgui of Guinea.

Ahram Beverages Co., the largest brewery in An international consortium of emerging-market

Egypt, raised $87 million. investment firms bought a 40% stake in the Social

In anticipation of its privatization, the Jordan Security Bank of Ghana for $16.6 million.

Telecommunications Corporation (TCC) was trans- The first Ugandan bank to be privatized, Stan-

formed into a public company onJanuary 1, 1997. bic Bank, was sold for $6.8 million, representing

Despite the ongoing political crisis in Albania, 49% of the shares previously owned by the state.

foreign investors participated in the auction sale of The opening of the Kampala Stock Exchange

two state companies. A Lebanese buyer paid $4.3 (KSE) this year is expected to boost the pace of

million for a 70% stake in Elbasan Cement, while a privatization, with nearly 20 large companies

Jordanian firm bought a 51 % stake in Petrolimpex expected to be divested through public offerings.

for $1.8 million. Another seven companies offered The bid for a 51% stake in C6te d'lvoire's

for auction were purchased by local investors. national telephone company, CI-Telcom, was

Poland continued the privatization of com- awarded to France Telecom at a price of $193

mercial banks. An additional 32% stake in Bank million.

Gdanski was sold for $83.4 million to Bank IG, In Zambia the privatization of the state-owned

which already holds 31 % of the bank's shares. The copper mining giant, ZCCM, got under way with

central bank also approved the increase in Allied the awarding of a tender for the Kansashi copper

Irish Bank's (AIB) holding in Wielkopolski Bank mine to a US firm. ZCCM, which accounts for

Kredytowy, from 16.3% to 60.2%. To achieve this, nearly 90% of Zambia's export earnings, will be

Allied will take over a 23.9% stake currently owned unbundled and sold off in nine units.

Multilateral flows countries' desire to close loans before the end of

the year (where the fiscal year coincides with the

Multilateral commitments drop sharply calendar year). Still, commitments are also down

New lending commitments from multilateral 35% from the first quarter of 1996, with the World

agencies decreased from $15 billion in the fourth Bank, the Asian Development Bank, and the

quarter of 1996 to $4 billion in the first quarter of Inter-American Development Bank all showing

1997 (table 8). In part, this decline may reflect significant declines.

M Financial Flows and the Developing Countries

Official flows

World Bank commitments are down ASEAN countries explore currency fundWorld Bank commitments fell to about $3 billion Finance ministers of member countries of the

from $5 billion in the last quarter of 1996, but Association of Southeast Asian Nations (ASEAN)

accounted for 69% of all multilateral commit- have asked the IMF to prepare a proposal for a

ments, up from 34% last quarter. Concessional regionwide currency stabilization fund. Monetary

lending through the International Development authorities have become increasingly concerned

Association (IDA) accounted for 36% of total about the sustainability of the large capital inflows

Bank Group lending, up from 17% last quarter. attracted by high domestic interest rates. Some

Africa and South Asian regions accounted for officials warn that as the ASEAN economies

80% of IDA lending. Population, health, and gen- become more closely linked, a currency crisis in

der issues and transport sectors accounted for one country could have serious repercussions in

almost 40% of IDA lending. East Asia received the the region.

most IBRD funds (72% of total commitments),

with Latin Americasecond (22%). Chinareceived Bilateral ODA and Exportthe largest amount of loans (26% of the total), fol- Creditslowed by Indonesia (16%).

Export-Import Bank of Japan does itsCommitments by other multilaterals fall first microlendingAsian Development Bank (ADB) commitments The Export-Import Bank of Japan lent 8 billion

were $286 million, significantly lower than the $3.8 yen to the Philippines National Bank to be onlent

billion in commitments last quarter. Concessional for the purchase of construction machinery and

loans were 55% of total lending, up from 33% last medical equipment. This is the first time EXIM

quarter. ADB is planning to lend Vietnam $1.5 bil- bank has lent to a commercial bank for use by

lion between 1997 and 2000, which would make the small and medium-size projects. The EXIM bank

country ADB's largest recipient of concessional also lent $150 million to Chile for a copper mine

funding. Inter-American Development Bank com- expansion project.

mitments fell to $789 million this quarter, of which

only 15% ($121 million) was on concessional terms. Export-Import Bank of the US lends toHaiti and Bolivia received all of the concessional India and Indonesialoans, and Uruguay borrowed 25% of nonconces- The US Export-Import Bank approved a $19 mil-

sional funds. The African Development Bank com- lion loan to an Indian power plant for the

mitted $105 million, of which 5% is on concessional purchase of environmentally beneficial technol-

terms-to Kenya and C6te d' Ivoire. The largest ogy. Financing for environmental exports

nonconcessional loan was made to Chad for a road reached $134.5 million, up from $43.9 million in

development project ($19 million). the first quarter of 1996. The US Ex-Im bank also

TABLES8 Multilateral commitments to provided $300 million in financing to Indonesiadeveloping countries for pulp and paper equipment.

US$ millions, in calendar year 1996 19971996 Q4 Ql TABLE 9 World Bank commitments for first

Total 42,484 15,113 4,128 quarter, 1997African Development Bank 569 517 105 US$ milaions IDA IBRD

Asian Development Bank 6,707 3,795 286 Region commitments commitmentsInternational Bank far Reconstructian SbShrnArc 6

IntematonalBandforRelopmentruch 22,040 4,968 2,796 East Asia and the Pacific 112 1,302European Bank for Reconstruction Europe and Central Asia 63 49

and Development 676 n.a. n.a. Latin America and the Caribbean 20 395Inter-American Development Bank 6,958 4,612 789 South Asia 442 52

International Monetary Fund 5,534 1,121 153

Note: Figures are available for January and February only. Total 998 1,798Source: Multilateral lending institutions. Source: World Bank.

May 1997 5

Official creditors debt service, falling due over a 3-year period.

Four Paris Club agreements were signed during Guinea received a 50% rescheduling of its debt

the first quarter of 1997. Ethiopia, Madagascar, service. In all cases debt rescheduled under previ-

and Tanzania obtained a 67% rescheduling of ous Paris Club agreements was also included in

the current arrangements. Participating creditorsTABLE 10 Paris Club rescheduling agreements, January-March 1997 also agreed in principle to consider a stock reduc-

US$ millions Dote Consoidoted Cut-off Consolirotion tion at the end of the 3-year consolidation period,

Country of ogreement omount dGte period through Terms if these countries remained in compliance with

Tanzania 21 Jan 97 608 30 Nov96 30 Nov99 Naples current agreements.Ethiopi 24 Jan 97 184 31 Dec 96 31 Oct 99 NaplesGuinea 26 Feb 97 - 31 Dec 96 31 Dec 99 Naplesa o

Madagascar 26 Mar 97 247 3 1 Dec 96 30 Nov 99 Naples Commercial creditors-Not available. There were no new debt relief agreements ona. 50% reduction on maturities.Source: World Bank. commercial bank debt during the first quarter.

FIGURE 16 Population pyramid: high-income industrial countries Bank publications oncapital flows

Mid- 1995 The World Bank recently completed two major

Age studies of interest to observers of internationalMale Female financial markets. Private CapitalFlows toDeveloping

75 or older Countries: The Road toFinancial Integration analyzes

70-74 the implications for developing economies of

0 ~~Cffi ~~~a m increased integration with the world economy65-69 and discusses how governments can best manage

60-64 this process. Global Development Finance 1997 (ear-lier issues of this series are titled World Debt Tables)

_l 55-59 - reviews capital flows to developing countries over

-;; ;; 50-54 :g the past year and provides comprehensive statis-

45-49 g g g tics on net resource flows and external debts of

4-<~~&5~~: ~4 developing countries. The following are two40-44 selected topics from the many issues covered in

35-39 5• these studies.

30 34 - - -Private Capital Flows: The Road to Financial Inte-

3 0 34gration considers the factors that are driving the

25-29 surge of private capital to developing countries

______________________ 20-24 - «-r - - and leading to the progressive integration of_______________ -. - d~~~~~~~~~~~~~~~eveloping countries in worl fnancilmres

15-19 It argues that while the cyclical downturn in inter-

10-14 § national interest rates in the early 1990s provided5-9 - - inital impetus, these private capital flows are

-9 -increasingly reflecting structural factors under0-4 way at the international level and in developing

35 30 25 20 /5 10 5 0 0 5 10 15 20 25 30 35 countries.Population (millions) Looking forward, the report argues that an

Source: World Bank. important further impetus to private capital flows

S FinancialFlows and the Developing Countries

* Financial brief

to developing countries will come from the demo- earn higher returns on investments. All three fac-

graphic shift under way in industrial countries. tors are likely to result in a greater response to

Industrial countries now have a pronounced investment opportunities in emerging markets.

bulge in their demographic structures, reflecting (For more detail see World Bank, Averting the Old

the aging of the baby boom generation and Age Crisis: Policies to Protect the Old and Promote

declining birth rates (figure 16). This will lead to Growth, New York: Oxford University Press, 1994.)

a steady rise in the proportion of elderly to active Although the pace of pension reform in differ-

population in all industrial countries. In sharp ent countries is uncertain, the direction is clear.

contrast, the population is much younger in devel- Global pension assets are likely to rise substantially

oping countries (figure 17). and with a growing trend toward international

There are three broad implications of this dif- diversification. The share of international equities

ference in demographic patterns. First, the aging in pension fund assets is expected to increase from

of populations in industrial countries could lead very low levels in most countries (figure 18).

to an increase in savings in the short to medium Pension funds, therefore, are likely to be a major

term. Second, aging and the associated slowing in force in the demand for portfolio equities from

growth of the labor force are likely, other things

being equal, to exert downward pressure on thebein eqal,to eertdowwar presur onthe FIGURE 17 Population pyramid: developing countries

rate of return to capital relative to that of labor in

industrial countries. (But technological innova- Mid-1995

tions, which increase the rate of return to capital,

could mitigate some of these adverse effects.) M Age Female

Given the demographic structure prevalent in 75or older _

developing countries, the reverse can be expected

there. Thus, differences in demographics are 70-74 m

likely to reinforce the differentials in the expected 65-69

rates of return to capital between industrial and _ 06

developing countries. Together, these factors 60-64

should provide a stimulus for capital to flow to 55-59

emerging markets. Third, and perhaps most50-54

important in terms of impact, the aging of the

population in industrial countries is leading to 45-49

pressures for pension reform. 40-44_4-The growing recognition that pension obliga- - z

tions under the current system will place heavy fis- 3

cal burdens on industrial economies and that the 30-34 - '0

problem must be addressed in the next 10 to 15 25-2925-29 Xyears is beginning to spur pressures to reform pen-

sion systems. In particular, there are pressures to 20-24

move away from pay-as-you-go systems and toward 15-l9

more funded systems. Support is also mounting to I'

privatize pension schemes, through an increasing 0- i4

reliance on private employer and individual 5-9 M

schemes (the so-called second and third pillars of - 0 40-4old age security) as well as through greater private

300 250 200 150 100 50 0 50 100 150 200 250 300sector management of public pension schemes. Population (millions)

There is also interest in deregulating the invest- Note: Includes low-income, lower-middle, and upper-middle income economies.

ment allocations of pension funds so that they can Source: World Bank.

May 1997 E

Financial brief

FIGURE I8 International equities as share in pension fund assetsPercent

28

24

Global17

DevelopmentFinance 1997highlights thestrong increase ISS mo_in private 2

capital flows Ireland United Belgium Netherlcnds United Japan Switzerland Germany Denmark France Swedento developing Kringdom States

to developingSoreWadlngmSource: World Bank.

countries overthe past year developing countries. Today, pension funds hold external finance can play an important comple-

about $70 billion in emerging-market assets. This mentary role. Most external finance has gone to

could rise very considerably over the next decade. private borrowers, although the private provision

Global Development Finance 1997 highlights the of infrastructure remains a small fraction of the

strong increase in private capital flowvs to devel- total in developing countries, probably less than

oping countries over the past year. One factor in 10% in East Asia and somewhat more in Latin

this increase hbas been the growing tendency for America.

developing countries to finance their infrastruc- How broadly based is the recent growth of

ture through international capital markets, a infrastructure finance, and what are the prospects

change reflected in the growth of developing for growth? What steps can be or are being taken

countries' commercial bank borrowing and their to remove constraints on infrastructure project

increased use of bond and equity markets. finance? The fast growth of the market for infras-

Finance for infrastructure projects typically tructure finance during the 1990s is likely to con-

comes in a package bundling commercial bank tinue and to broaden, the report argues, because

loans, export credit guarantees, equity, debt, and of the desire of developing country governments

contingent liabilities ofthe host government rang- to deliver efficient, high-grade services and the

ing from "full faith and credit guarantees" to potential for increased developing country access

"comfort letters." Power generation, telecommu- to international capital markets. Private sector

nications, and transport have attracted the most borrowers will lead the way, supported by guaran-

project finance. tees that should encourage, not substitute for, get-

International capital markets contribute a sub- ting the prices and the regulatory rules right.

stantial amount to infrastructure project finance Underlying this argument are the following

(about $22 billion a year) but far less than is key points:

required to provide adequate levels of infrastruc- * Capital market finance for infrastructure has

ture services. Ultimately, most of the funds grown rapidly in the 1990s, increasing some eight-

needed must be generated domestically, espe- fold to about $22 billion in 1995. But the growth

cially through appropriate consumer pricing, but has been uneven, varying across regions, coun-

FinancialFlows and the Developing Count ries

* Financial brief

tries, and sectors. East Asia has received the most RGURE l9 Distribution of infrastructure financing among developinginfrastructure financing over the past 10 years (fig- countries, 1 986-95ure 19). Among infrastructure sectors, power gen- US$ billions

eration and telecommunications have attracted44 Public Ui

more financing than power transmission, power Private u

distribution, and water supply.

* The private sector has outpaced the public sec-

tor in borrowing, albeit with the help of substantial

public guarantees. Lenders have often been cov- 25

ered by guarantees from export credit agencies.

* Guarantees from host governments, export

credit agencies, and multilateral institutions can _ 2

mitigate current and future policy uncertainties 6

and the commercial and foreign-exchange risks 0.5 I

inherent in large-scale infrastructure financing. Siub-Saharan East Asia South Asia Europeand Latin America Middle East

But care must be taken to ensure that guarantees Africo and the Pacific Central Asia and the and North Africa

do not merely substitute for the removal of mar- Coribbean

ket distortions. Source: Euromoney Loanware, Euromoney Bondware, and World Bank.

May 1997 C

TABLE A. I World Bank commitments for first quarter, 1997US$ millions

Region Sector IDA IBRD

AfricaBurkina Faso Education 26

Cameroon Public Sector 25Comoros Agriculture 2

Djibouti Public Sector 7Ghana Finance 21Kenya Agriculture 40

Madagascar Environment 30Madagascar Multisector 70

Mozambique Multisector 100Niger Multisector 30

Senegal Agriculture 2Zambia Multisector 8

East Asia and the PacificCambodia Agnculture 27Cambodia Population 30

China n.a. 440China Tranportation 300

Indonesia Electric Power 20Indonesia Population 29Indonesia Transportation 105Indonesia Urban Development 295Thailand Educabon 114Vietnam Transportation 55

Europe and Central AsiaArmenia Industry 17

Azerbaijan I Agriculture 15Bosnia-Herzegovina lndustry 10Bosnia-Herzegovina Population and health 15Bosnia-Herzegovina | Social Sector 7

Croatia Agriculture 42Kazakstan Water Supply 7

Latin America and the CaribbeanArgentina I Public Sector 16

Dominican Republic Transportation 75Ecuador Agriculture 21

Honduras Public Sector 20Peru Finance 183Peru Multisector 100

South AsiaBangladesh Transportation 133Bangladesh Water Supply 80

India Environment 50India Population 142India Transportation 52

Nepal Water Supply 18Sri lanka n.a. 18

Total 998 1,798


* Statistical appendix

TABLE A.2 New bond issues for 1 997Q IBonds greoter than US$ 150 million

Totalnominalamount(US$

equivalent, Industry Issue Issue Spread FinalIssuer country millions) Issuer Issuer type sector' Currency price t,pe at launch coupon Maturity

Argentina 500.20 Republic of Argentina Government SG Peso 99.4230 Fixed 160.00 1 1.7500 10 yearsArgentina 2000.00 Republic ofArgentina Government SG US$ 99.4160 Fixed 462.50 11.3750 20 yearsArgentina 300.00 Perez Companc SA Private OG US$ 100.0000 Fixed 252.00 9.0000 7 yearsArgentina 891.21 Republic ofArgentina Government SG DM 101.5000 Fixed 195.00 7.0000 7 yearsArgentina 1 76.19 Perez Companc SA Private OG Lira 100.0000 Floating 3-month 5 years

LIBOR + 1.65%Brazil 324.28 Banco Naci6nal de Desenvolv- Public BF Lira 100.9700 Fixed 8.5000 5 years

imento Economico e Social-BNDESBrazil 610.61 Federative Republic of Brazil Government SG DM 101.9000 Fixed 230.00 8.0000 10 yearsBrazil 200.00 Banco Safra (Cayman Islands) Ltd Private BF US$ 99.7500 Fixed 218.00 8.3750 7 yrs I I months

China 330.00 State Development Bank of China Public BF US$ 99.7340 Fixed 80.00 7.3750 10 yearsChile 220.00 Endesa Chile Overseas Co Public EU US$ 100.0000 Fixed 78.00 7.3250 40 yearsChile 200.00 Endesa Chile Overseas Co Public EU US$ 99.9360 Fixed 127.00 8.1250 100 yearsChile 230.00 Endesa Chile Overseas Co Public EU US$ 99.5980 Fixed 105.00 7.8750 30 years

Colombia 750.00 Republic of Colombia Government SG US$ 99.7070 Fixed 130.00 7.6350 10 yearsColombia 250.00 Republic of Colombia Government SG US$ 99.8840 Fixed 170.00 8.3750 30 years

Croatia 300.00 Republic of Croatia Government SG US$ 99.9170 Fixed 80.00 7.0000 5 yearsHungary 414.28 National Bank of Hungary Government CB Yen 100.0000 Fixed 2.7500 7 years

Indonesia 300.00 APP Global Finance (l1l) Cayman Ltd Private FC US$ 100.0000 Floating 6-month LIBOR 5 yearsIndia 214.00 Reliance Industries Ltd Private TX US$ 100.0000 Fixed 175.00 8.2500 30 yearsIndia 175.00 Indian Petrochemicals Corp Ltd Public CM US$ 100.0000 Convertible 2.5000 5 years

Mexico 1000.00 United Mexican States Government SG US$ 100.0000 Fixed 335.00 9.8750 10 yearsMexico 315.25 United Mexican States Government SG Lira 100.8000 Fixed 192.00 9.1250 10 yearsMexico 300.00 TV'AztecaSAdeCV Private RC US$ 100.0000 Fixed 400.00 10.5000 10 yearsMexico 915.92 United Mexican States Government SG DM 101.6650 Fixed 260.00 8.2500 12 yearsMexico 402.58 United Mexican States Government SG Yen 100.0000 Fixed 4.0000 7 yearsMexico 207.59 Petroleos Mexicanos Public OG Lira 100.0000 Floating 3-month 7 years

LIBOR + 1.65%Oman 225.00 Sultanate of Oman Government SG US$ 99.8470 Fixed 73.00 7.1250 5 years

Panama 500.00 Republic ofPanama Government SG US$ 99.8250 Fixed 175.00 7.8750 5 yearsPhilippines 300.00 Philippine Long Distance

Telephone Co Private TC US$ 99.6240 Fixed 170.00 8.3500 20 yearsPhilippines 200.00 Philippine Long Distance

Telephone Co Private TC US$ 99.9240 Fixed 150.00 7.8500 10 yearsPhilippines 200.00 JG Summit Philippines Ltd Private IC US$ 99.4540 Fixed 193.00 8.3750 7 years

Russia 1 163.53 Russian Federation Government SG DM 101.7500 Fixed 370.00 9.0000 7 yearsThailand 300.00 Bangkok Bank Public Co Ltd Private BF US$ 100.0000 Fixed 155.00 8.3750 30 yearsThailand 200.00 Industrial Finance Corp of Thailand Private BF US$ 99.6240 Fixed 90.00 7.3750 10 years

Turkey 307.35 Republic of Turkey Government SG DM 99.9000 Fixed 275.00 7.7500 7 yearsTurkey 180.51 Republic of Turkey Government SG Lira 100.0000 Fixed 246.00 9.0000 5 years

a. AM is automotive, BF is banking-financial services, CB is central bank, CM is chemicals, CN is construction, EC is electronics-electrical, EN is engineering, EU is energy-utility, FC is financialcorporate, FD is food and drnk, FP is forest products-packaging, FR is financial repackaged, HC is healthcare-pharmaceutical, IC is industrial-conglomerates, IS is iron-steels, IT is investmenttrust-company, LA is local authority, MA is manufacturing, 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, RPis rubber-plastics, SG is state authority-govemment, TB is tobacco, TC is telecommunications, and TX is textiles-clothing.Source: Euromoney Bondware.

May 1997 e

I Statistical appendix

TABLE A.3 New loan issues for 1 996Q4Loon amount greater than US$ 150 million

Totalamount

Borrower Borrower (US$ equivalent,country Borrower name type Currency millions) Maturity Margina

Argentina Republic ofArgentina Government Yen 151.107Argentina Banco Rio de la Plata SA Private US$ 270.000 I yearArgentina Galicia y Buenos Ares Funding Corp US$ 275.000 I year

Bahrain State of Bahrain Government US$ 200.000 15 years LIBOR:60.00 bpBahrain State of Bahrain Government US$ 300.000 10 years

Brazil Companhia Paulista de Trens Metropolitanos Private US$ 171.000 13 years LIBOR:65.00 bpChile Telecomunicaciones Chilenas Public US$ 315.000 6 years LIBOR:28.00 bpChile Banco de Chile Private US$ 165.000 5 yrs 6 months LIBOR:29.00 bp

Colombia Chivor SA Public US$ 400.000 5 years LIBOR: 175.00 bp from I yr to 2 yrs,

200.00 bp from 3 yrs to 5 yrsHungary Hungarian Telecommunications Co Ltd (MATAV) Government Ecu 181.200 3 years

Indonesia Republic of Indonesia Government US$ 500.000 8 years LIBOR:62.50 bpIndonesia First Pacific Investments Ltd Private US$ 245.000 3 years LIBOR: 175.00 bpIndonesia PTArthayasa Grahatama Private US$ 232.700 8 years LIBOR:255.00 bp, LIBOR:235.00 bpIndonesia Corridor Block Gas Project Private US$ 450.000 10 years LIBOR:200.00 bpIndonesia PT Asia Cellular Satellite Private US$ 250.000 7 yrs 6 months LIBOR:400.00 bp

India Indian Oil Corp Ltd Public US$ 210.000 6 monthsMalaysia Megasteel Sdn Bhd Private Ringgit 279.107 9 years LIBOR: 162.50 bpMalaysia Megasteel Sdn Bhd Private US$ 240.000 9 years LIBOR: 162.50 bp, LIBOR: 137.50 bpMalaysia Shell Refining Company (FOM) Bhd Private US$ 360.000 8 yearsMalaysia Gelora Pasifik Sdn Bhd Private Ringgit 178.042 6 yrs 6 months CF: 185.00 bpMexico Fomento Economico Mexicano SA de CV (FEMSA) Prvate US$ 350.000 3 years LIBOR: 150.00 bp for up to I yr,

175.00 bpfrom I yrto2yrs,200.00 bp from 2 yrs to 3 yrs

Mexico Cementos Mexicanos SA de CV (CEM EX) Private US$ 600.000 3 years LIBOR: 125.00 bpPoland LOT-Polish Ajrlines Public US$ 225.000Poland Polkomtel Prvate US$ 450.000Poland PKP Public Zloty 209.014 10 yearsPoland Polkomtel Private US$ 210.000 1 0 monthsPoland Petrolexportimport SA Public US$ 200.000 I yearRussia Rossijskoje A/O Gazprom (Gazprom) Public DM 872.651

South Africa First National Bank of Southern Africa Ltd (FNB) Private US$ 250.000 I year LUBOR:28.50 bpSouth Africa ABSA Bank Ltd Private US$ 160.000 3 years LUBOR:37.50 bpSaudi Arabia Ibn Rushid Private US$ 850.000 10 years LIBOR:82.50 bp

Slovaka Slovak Telecom Public US$ 170.000 5 years LUBOR:40.00 bpThailand Independent Power Producer (Thailand) Private US$ 176.000 I S yearsThailand Ek-Chai Distribution System Co Ltd Private US$ 160.000 5 years SIBOR: 125.00 bp from I yr to

2 yrs, 135.00 bp from 3 yrs to S yrsTurkey Uni-Mar Power Private US$ 465.000

a. LIBOR is London interbank offered rate; JIBOR is Jeddah interbank offered rate.Source: Euromoney Loanware.

FinancialFlows and theDeveloping Countries


TABLE A.4 New equity issues for 1 996Q4

Totalnomincl Shareamount offer(US$ price

equivalent, Shore (US$Issuer country millions) typea Issuer equivalent)

Argentina 18.9 A,M,X Cresud SACIFyA 18.5025.2 A,M,X Cresud SACIFyA 18.5018.9 M,X Cresud SACIF y A 1.85

Tatal 62.9

China 97.6 I,A,V,X,M China Eastern Airlines Corp Ltd 18.0097.6 I,A,V,X,M China Eastern Airlines Corp Ltd 18.0086.6 I,V,M,X China Eastern Airlines Corp Ltd 1.39

166.2 I,M Shenzhen Expressway Co Ltd 2.2018.5 I,M Shenzhen Expressway Co Ltd 2.20

158.7 I,M,X Beijing Datang Power Generabon Co Ltd 2.52106.0 I,M,X Beijing Datang Power Generation Co Ltd 2.5240.5 I,M Beijing Datang Power Generabon Co Ltd 2.52

160.3 I,M Beijing Datang Power Generation Co Ltd 2.52Total 932.0

Egypt 87.5 G,X Al-Ahram Beverages Co 15.50Total 87.5

Hungary 27.8 I,X Mezogep RT 1,880.000.7 I Mezogep RT 1,880.00

41.1 I'M Euronet Services Inc 13.5041.1 I,M Euronet Services Inc 13.50

Total 110.8

Indonesia 31.5 X PT Mulialand 2,500.00110.8 I PT Putra Surya Multidana Tbk 2,175.00115.3 I PT Putra Surya Multidana Tbk 2,175.00

Total 257.6

India 526.6 G,V,X Videsh Sanchar Nigam Ltd 13.93Total 526.6

Malaysia 31.5 U,B Arab-Malaysian Merchant Bank Bhd 23.50282.4 I YTL Power International Berhad 4.00

Total 313.9

Mexico 1 1.9 A,l,M,X Grupo Minsa SAde CV 14.0017.9 A,I,M,X Grupo Minsa SA de CV 14.0019.9 I,M GrupoMinsaSAdeCV 11.19

Total 49.7

Philippines 18.6 I Reynolds Philippine Corp 4,5522.7 I Reynolds Philippine Corp 4.55

114.0 I Equitable Banking Corp 113.30153.4 I Equitable Banking Corp 113.30

Total 308.7

Poland 28.0 V Agros Holding SA 70.0020.2 Agros Holding SA 70.006.8 Agros Holding SA 70.00

Total 55.0

Slovenia 24.7 G,X SKB banka dd 19.00Total 24.7

Turkey 1.4 I Ceytas Ceyhan Tekstil Sanayii AS 3,300.003.2 I Ceytas Ceyhan Tekstil Sanayii AS 3,300.00

Total 4.6

Zimbabwe 21.2 NMBZ Holdings Ltd 1.308.5 NMBZ Holdings Ltd 23.30

Total 29.7

Note: Numbers may not sum to totals shown because of rounding.a. A is American depository, B is bought deal/block, F is fund, G is global depository, I is initial public offer, M is multitranche, V is privatization, and X isCrossborder.Source: Euromoney Bondware.

May 1997w


TABLE A.5 Bank and trade-related nonbank claimsUS$ millions

1996Q2

Trode-relotedBonk Guoronteed nonbonk

Country group or country 1991 1992 1993 1994 1995Q4 Totol claims cloims claims

All developing countries 770,394 804,246 813,265 862,381 970,604 991,647 815,993 124,075 175,654EastAsiaand Pacific 131,269 153,165 170,499 207,482 271,501 294,562 261,583 26,587 32,979

Europe and CentralAsia 172,633 172,552 171,024 167,843 188,268 191,202 152,378 32,018 38,824Latin America and the Caribbean 267,731 280,324 282,013 290,146 304,361 304,053 270,388 29,200 33,665

Middle East and NorthAfrica 103,099 98,620 95,500 98,215 101,228 97,796 59,897 21,069 37,899South Asia 21,566 25,083 23,265 26,322 30,554 31,729 25,180 6,988 *6,549

Sub-Saharan Africa 74,096 74,502 70,964 72,373 74,692 72,305 46,567 8,213 25,738

Severely indebted middle-income 235,887 242,785 243,652 247,550 257,947 259,439 228,248 21,718 31,191Argentna 36,356 39,640 35,671 38,942 40,7S9 40,794 34,957 3,436 S,237

Bolivia 534 604 691 681 792 755 SIC 44 245Brazil 71,931 74,069 76,872 70,897 82,344 85,639 77,048 3,146 8,591

Bulgana 8,909 8,067 7,140 3,899 3,665 3,336 2,533 378 803Cuba 4,858 4,764 4,397 4,568 4,973 4,518 2,878 136 1,640

Ecuador 4,553 4,198 3,661 3,926 3,449 3,850 3,196 290 654Gabon 2,051 1,952 1,828 1,822 1,730 1,639 582 108 1,057

Jamaica 737 753 717 865 819 826 565 142 261Jordan 3,297 2,869 2,700 2,575 3,123 3,337 1,777 649 1,560Mexico 72,485 75,687 78,819 85,579 80,845 77,776 71,347 12,948 6,429

Panama 22,926 22,725 23,955 26,235 25,929 26,690 26,518 172 172Peru 6,143 6,423 5,972 6,298 8,317 9,082 5,766 225 3,316

Syrian Arab Republic 1,107 1,034 1,229 1,263 1,202 1,197 571 44 626

Severely indebted low-income 57,181 58,425 56,457 56,084 56,690 54,655 30,696 5,373 23,959

Moderately indebted low-income 23,141 26,579 24,397 27,042 31,374 32,552 25,570 6,889 6,982

Moderately indebted middle-income 284,336 291,390 283,426 290,144 317,190 321,732 250,598 55,937 71,134

Selected countriesa 255,290 282,323 297,071 333,037 405,683 426,829 361,719 53,093 65,110Chile 9,149 1 1,188 1 1,293 13,674 15,233 14,356 13,01 1 794 1,345China 41,381 48,566 56,299 66,736 77,813 85,289 75,461 11,989 9,828

Colombia 8,479 8,795 9,244 10,330 11,744 12,067 10,829 1,805 1,238C6te d'lvoire 4,042 3,986 3,625 3,532 3,445 3,231 1,902 289 1,329

Egypt 13,569 1 1,886 10,448 10,049 1 1,506 11,458 2,877 1,122 8,581Hungary 11,151 9,289 8,004 8,761 8,859 8,244 7,524 651 720

India 15,383 18,601 16,460 18,308 19,985 20,609 17,688 4,396 2,921Indonesia 39,773 46,967 44,730 50,126 58,463 60,796 51,474 7,086 9,322Malaysia 10,062 12,886 17,937 16,853 20,881 25,595 23,585 1,768 2,010

Morocco 8,053 7,994 7,410 7,669 7,349 7,176 4,883 2,505 2,293Nigeria 12,896 13,386 12,348 12,480 13,127 12,378 2,847 1,228 9,531

Philippines 1 1,839 1 1,063 10,715 1 1,212 12,912 15,687 1 1,166 2,557 4,521Thailand 24,953 30,552 37,872 60,204 98,867 104,456 98,346 2,984 6,110Turkey 23,094 24,425 29,238 24,401 27,797 28,967 25,173 8,903 3,794

Uruguay 1,991 2,581 2,776 2,483 3,115 2,835 2,752 159 83Venezuela 19,475 20,158 18,672 16,219 14,587 13,685 12,201 4,857 1,484

Offshorebankingcenters 1 19,142 135,967 147,872 154,194 193,829 218,957 211,491 6,001 7,466

Oil exporters 185,856 187,950 133,775 135,636 134,792 127,757 80,169 25,999 47,588DRS reporters 139,563 142,242 87,385 82,166 83,244 78,460 46,758 22,442 31,702

DRS reporters 643,753 680,983 756,394 829,495 954,401 988,639 852,087 1 14,478 136,552

Note: See country classifications at the end of this statistical appendix.a. Most of these countries are also included in the indebted country groups,Source: OECD; Bank for International Settlements, Stotistics on Externol Indebtedness.

FinancialFlows and theDeveloping Countries

Statistical appendix

TABLE A.6 Commercial bank claims on developing countriesUS$ millions

Claims Liabilities

Country group or country 1995 1996QI 1996Q2 1996Q3 1995 1996QI 1996Q2 1996Q3

All developing countries 826.049 833,887 851.998 875,964 753,852 760,536 784,367 793,671EastAsiaand Pacific 236,478 244,391 260,415 269,995 106,985 105,940 111,807 109,427

Europe and Central Asia 144,734 148,691 149,446 155,454 11 6,330 1 15,265 1 17,775 120,435Latin Amenca and the Caribbean 280,777 279,457 281,938 287,006 244,865 248,126 266,780 269,711

Middle East and North Africa 87,585 86.061 84,412 87,534 178,914 182,013 179,910 183,745South Asia 27,777 27,816 28,307 29,198 59,378 63,165 61,514 64,398

Sub-Saharan Africa 48,698 47,471 47,480 46,777 47,380 46,027 46,581 45,955

Severely indebted middle-income 232,117 230,794 232,075 236,048 184,628 184,844 201,050 200,169Argentina 34,918 33,900 35,146 36,154 24,973 24,692 26,550 23,839

Bolivia 508 501 575 587 998 1,097 1,350 1,21 1Brazil 73,153 75,496 78,314 79,610 60,271 59,579 71,849 71,057

Bulgaria 2,829 2,655 2,452 2,210 1,881 1,494 1,274 1,267Cuba 3,135 3,068 804 775 739 81 1

Ecuador 2,846 2,972 3,415 3,368 2,303 2,641 2,924 3,093Gabon 638 591 582 536 695 757 708 633

jamaica 554 543 563 602 954 959 1,082 1,067Jordan 1,333 1,205 1,547 1,128 6,675 6,654 7,148 6,903

Mexico 73,324 71,871 70,188 72,651 33,525 33,879 35,075 36,684Panama 33,344 32,132 32,960 32.549 39,465 39,500 38,762 38,900

Peru 4,978 5.317 5,768 6,187 4,551 5,096 5,507 5,839Syrian Arab Republic 557 543 565 466 7,533 7,721 8,082 8,865

Severely indebted low-income 31,405 31,167 30,606 30,225 37,202 36,917 37,042 36,471

Moderately indebted low-income 23,894 24,626 25,415 26,344 21,698 23,703 24,235 25,326

Moderately indebted middle-income 239,197 243,788 246,903 255,462 194,017 192,513 195,667 201,205

Selected countriesa 332,502 339,858 356,436 368,333 225,822 225.476 236,204 234,924Chile 13,900 13,223 12,999 13,124 11,999 1 1,618 12,430 12,302

China 67,077 70,185 75,002 77,323 57,428 55,023 57,801 59,903Colombia 10,531 10,751 10,928 11,660 7,436 7.414 7,329 7,734

C6te d'lvoire 1,959 1,847 1,787 1,639 2,075 2,278 2,050 1,893Egypt 3,101 2,972 2,840 3,070 27,265 25,133 24,369 24,795

Hungary 8,036 7,646 7,485 7,948 2,548 2,393 2,692 2,883India 17,049 17,443 17,628 18,21 1 12,609 14,568 14,904 16,546

Indonesia 48,935 50,484 51,468 53,855 1 1,482 11,657 11,0 13 10,823Malaysia 18,750 19,018 23,577 26,030 13,034 IS,116 17.534 16,991

Morocco 4,916 4,86 1 4,880 4,876 6,225 6,029 6,3 11 6,431Nigeria 3,067 2,991 2,690 2,699 4,001 3,708 4,387 4,036

Philippines 8,076 8,890 1 1,069 11,740 7,339 6,483 7,644 7,456Thailand 92,160 94,31 1 97,750 98,456 11,807 1 1,700 12,075 9,1 14Turkey 20,272 20,644 21,800 23,136 23,800 24,471 26,058 22,779

Uruguay 2,989 3,151 3,693 3,708 6,272 6,292 6,924 6,791Venezuela 11,684 1 1,441 10,840 10,858 20,502 21,593 22,683 24,447

Offshore banking centers 1,285,460 1,256,266 1,243,306 1,249,558 1,083,943 1,070,932 1,055,660 1,068,207

Oil exporters 99,238 98,860 94,418 97,639 169,143 177,91 1 176,465 182,125DRS reporters 47,895 46,852 44,028 44,125 44,506 44,527 46,015 48,704

DRS reporters 821,204 836,667 863,919 885,395 595,277 599,048 629,142 628,401

Note: See country classifications at the end of this statistical appendix.a. Most of these countries are also included in the indebted country groups.Source: Bank for International Settlements, Intemational Banking and Financial Mcarket Developments.

May 1997w


TABLEA.7 Commercial bank claims on developing countries, by country of originUS$ millions

Conoda Germany'

Country group or country 1995 1996QI 1 996Q2 1996Q3 1995 1996Q I 1996Q2 1996Q3

All developing countries 17,411 17,060 17,960 18,007 1 68,365 171,174 171,050 181,638East Asia and Pacific 2,040 2,089 2,666 2,373 24,033 25,805 27,134 29,662

Europe and Central Asia 329 308 311 325 64,648 65,163 64,712 70,780Latin America and the Caribbean 13,419 12,995 13,317 13,553 37,673 37,595 38,108 39,106

Middle Eastand NorthAfrica 471 463 361 432 20,437 20,826 19,682 19,394South Asia 796 761 1,003 971 1 1,102 1 1,172 10,9 14 11,555

Sub-Saharan Africa 356 444 302 353 10,472 10,613 10,500 11,141

Severely indebted middle-income 6,762 6,675 6,834 7,058 32,548 32,520 33,312 34,275Argentina 1,041 1,101 1,180 1,195 7,897 7,698 7,970 8,650

Bolivia 0 0 0 0 431 416 434 449Brazil 2,558 2,374 2,333 2,325 10,934 11,621 1 2,333 11,638

Bulgaria 0 0 0 0 1,150 1,126 1,077 1,057Cuba 0 0 0 0 1,441 1,401 1,342 1,384

Ecuador 0 0 0 0 207 201 208 190Gabon 0 0 0 0 58 54 49 52

Jamaica 0 0 0 0 0 0 0 0Jordan 0 0 0 0 534 517 525 532

Mexico 2,746 2,678 2,792 3,018 5,369 5,160 4,991 5,756Panama 303 411 413 399 2,908 2,694 2,779 2,795

Peru 115 110 117 121 975 942 921 1,075Syrian Arab Republic 0 0 0 0 645 691 683 697

Severely indebted low-income 0 0 0 0 6,429 6,673 6,130 6,585

Moderately indebted low-income 253 387 463 370 10,685 10,579 10,407 10,981


Selected countriesb 3,713 3,701 4,238 3,871 53,913 55,215 56,622 62,207Chile 771 645 574 580 1,910 1,832 1,950 1,774

China 567 608 791 602 7,021 7,915 7,866 8,373Colombia 0 0 0 0 1,902 1,866 1,841 1,918

Cote d'lvoire 0 0 0 0 379 369 354 366Egypt 0 0 0 0 2,902 2,822 2,804 2,902

Hungary 0 0 0 0 4,340 3,997 3,981 6,127India 253 387 463 370 8,139 8,195 8,1 15 8,559

Indonesia 0 0 0 0 7,497 8,164 8,303 9,056Malaysia 364 357 393 514 1,326 1,291 1,479 1,749

Morocco 0 0 0 0 1,257 1,178 1,214 1,222Nigeria 0 0 0 0 553 497 478 489

Philippines 273 337 425 383 805 797 854 1,073Thailand 836 788 1,057 875 6,38 6,649 7,579 8,324

Turkey 0 0 0 0 8,277 8,442 8,633 9,145Uruguay 0 0 0 0 0 0 0 0

Venezuela 649 580 534 548 1,286 1,203 1,174 1,130

Offshore banking centers 14,175 13,663 15,382 15,552 122,347 131,402 126,849 127,383

Oil exporters 1,412 1,348 1,241 1,349 16,840 17,259 16,086 15,589DRSreporters 1,283 1,213 1,133 1,248 8,499 7,829 7,474 7,348

DRS reporters 13,1 18 13,131 13,784 13,800 156,601 158,773 160,443 169,680



TABLE A.7 Commercial bank claims on developing countries, by country of origin (continued)US$ millions

Italy Netherlondsc

Country group or country 1995 1 996Q I 1996Q2 1 996Q3 1994 1995Q2 1995Q4 1996Q2

All developing countries 22,869 22,208 22,629 22,380 26,289 29,096 32,315 35,053EastAsiaand Paci8c 33 50 54 55 5,161 6,323 7,389 8,395

Europe and Central Asia 8,001 7,276 7,191 6,968 4,264 5,321 5,437 6,317Latin America and the Caribbean 9,876 9,827 10,211 10,307 12,458 12.848 14,970 15,943

Middle East and North Africa 611 618 639 473 1,841 2,282 2,074 1,554South Asia 3,408 3,523 3,662 3,753 1,353 1,000 1,247 1,508

Sub-Saharan Afnca 939 912 873 823 1,213 1,322 1,198 1,336

Severely indebted middle-income 7,801 7,943 8,375 8,499 8,209 8,865 10,726 1 1,667Argentna 3,555 3,645 3,552 3,702 1,622 1,732 1,797 2,251

Bolivia 4 3 2 1 0 0 0 0Brazil 2,1 IS 2,098 2,290 2,3 15 3,139 3,376 4,166 5,387

Bulgana 337 321 312 281 0 0 0 0Cuba 0 0 0 0 0 0 0 0

Ecuador 76 74 105 90 391 264 319 345Gabon 0 0 0 0 0 0 0 0

Jamaica 0 0 0 0 0 0 0 0Jordan 0 0 0 0 0 0- 0 0

Mexico 1,449 1,527 1,524 1,519 2,058 2,584 3,617 2,800Panama 0 0 0 0 779 909 573 580

Peru 264 275 592 592 220 0 252 304Syrian Arab Republic 0 0 0 0 0 0 0 0

Severely indebted low-income 538 499 463 463 0 0 0 0

Moderately indebted low-income 0 0 0 0 1,270 907 1,048 1,242

Moderately indebted middle-income 8,904 8,431 8,343 7,910 9,939 1 1,596 12,374 13,135

Selected countriesb 2,978 2,908 2,828 2,613 10,465 1 1,573 13,044 14,536Chile 391 340 323 322 667 653 810 1,302

China 0 0 0 0 1,221 1,147 1,418 1,768Colombia 429 474 472 458 749 765 706 736

C6ted'lvoire IS IS IS 14 0 0 0 0Egypt 0 0 0 0 0 0 0 0

Hungary 264 241 237 224 0 354 457 433India 0 0 0 0 971 472 537 785

Indonesia 0 0 0 0 2,353 3,265 3,584 3,663Malaysia 0 0 0 0 475 474 476 625

Morocco 274 275 271 107 0 0 0 0Nigeria 522 484 448 449 0 0 0 0

Philippines 33 50 54 SS 439 532 846 817Thailand 0 0 0 0 671 907 1,065 1,521

Turkey 0 0 0 0 1,373 1,537 1,683 1,694Uruguay 296 296 297 302 757 697 699 669

Venezuela 753 732 710 681 787 771 762 522

Offshore bankingcenters 20,592 19,864 20,258 22,371 14,706 17,492 20,202 21,851

Oil exporters 7,251 6,791 6,691 6,498 2,357 2,588 2,447 2,028DRS reporters 7,251 6,791 6,691 6,498 2,052 1,997 1,929 1,845

DRS reporters 1 1,449 1 1,544 1 1,866 1 1,815 20,715 23,170 27,063 30,965

(Table continues on next page,)

May 1997 3


.ABLEA.7 Commercial bank claims on developing countries, by country of origin (continued)US$ millions

Swfitzernand United Kingdom'

Country group or country 992 1993 1994 1995 1993 1994 1995Q4 1996Q4

All developing countries 26,812 28,330 32,253 32,560 53,440 57,505 43,005 49,923EastAsiaand Pacific 1,821 2,930 3,044 4,762 7,713 9,612 10,014 15,378

Europe and Central Asia 4,710 4,465 4,353 4,052 9,301 9,866 5,851 6,447Latin America and the Caribbean 12,793 13,453 16,566 15,292 22,784 22,973 16,723 17,268

Middle East and North Africa 3,652 3,569 3,789 4,162 5,046 6,195 3,060 3,423South Asia 718 975 1,019 1,485 1,775 2,297 1,792 2,095

Sub-Saharan Africa 3,1 17 2,937 3,482 2,807 6,775 6,562 5,565 5,3 12

Severelyindebted middle-income 10,955 11,289 13,774 12,538 18,634 18,890 13,218 13,647Argentina 1,604 1,365 1,821 2,970 3,088 3,883 2,320 2,167

Bolivia 16 25 43 47 49 59 0 33

Brazil 2,821 3,023 2,232 2,088 5,572 5,100 4,242 4,552Bulgaria 248 264 75 40 231 89 17 17

Cuba 159 122 136 121 56 56 0 0

Ecuador 132 145 163 116 474 483 518 563Gabon 8 7 10 10 30 0 0 0

Jamaica 8 2 2 18 68 95 74 84

Jordan i 106 82 96 110 302 282 107 99Mexico 2,369 2,860 5,211 3,199 7,012 6,895 4,484 4,581

Panama 3,295 3,222 3,749 3,252 1,419 1,671 1,175 1,257Peru 172 151 203 535 302 277 281 294

Syrian Arab Republic 19 21 33 34 31 0 0 0

Severely indebted low-income 2,006 1,733 1,738 1,553 2,388 2,480 2,139 2,891

Moderately indebted low-income 856 1,081 1,077 1,578 1,898 2,326 1,763 2,053


Selected countriesb 6,488 7,847 8,069 9,864 16,488 17,995 16,165 22,427Chile 624 690 066 1,073 729 920 551 582

China 495 537 680 1,060 2,369 3,223 2,551 5,704Colombia 291 374 561 625 810 1,028 901 1,075

Coted'lvoire 100 99 115 84 123 172 155 190Egypt 383 339 287 317 726 796 716 991

Hungary 63 77 88 78 226 365 51 135India 417 631 538 971 1,162 1,507 1,157 1,435

Indonesia 317 593 742 1,128 2,031 2,467 2,727 3,833Malaysia 150 509 295 313 1,094 1,11 1 1,158 1,418

Morocco 131 117 141 192 263 272 84 80Nigeria 200 109 68 55 375 239 99 128

Philippines 121 165 158 403 885 702 631 1,173Thailand 633 1,010 1,164 1,447 1,310 2,014 2,822 3,128

Turkey 1,617 1,534 1,295 1,295 1,658 1,100 816 1,044Uruguay 106 218 242 180 251 333 327 306

Venezuela 839 844 629 641 2,476 1,746 1,419 1,205

Offshore bankingcenters 18,826 21,244 21,138 24,376 47,343 51,506 55,488 61,960

Oil exporters 5,291 4,398 4,586 4,826 10,161 9,563 5,182 5,240DRS reporters 2,942 2,157 1,970 2,002 6,919 4,902 2,501 2,521

DRS reporters 22,744 25,727 28,997 30,681 42,632 47,359 38,214 48,380



TABLE A,7 Commercial bank claims on developing countries, by country of origin (continued)US$ millions

United Statesc

Country group or country 1996Q1 1996Q2 1996Q3 1996Q4

All developing countries 93,979 98,687 104,661 11 6,635EastAsia and Pacific 13,953 16,042 17,076 19,845

Europe and CentralAsia 8,470 9,268 1 1,416 14,660Latin America and the Caribbean 62,627 63,842 67,525 72,656

Middle East and North Africa 3,737 4,230 3,675 4,043South Asia 2,363 2,336 2,182 2,299

Sub-Saharan Africa 2,829 2,969 2.787 3,132

Severely indebted middle-income 47,640 48,696 50,149 54,518Argentina 1 1,309 1 1,893 13,377 13,346

Bolivia 156 178 210 196Brazil 16,283 16,380 16,043 18,949

Bulgaria 1 18 82 45 178Cuba 0 0 0 0

Ecuador 903 940 1,073 1,128Gabon 5 5 4 5

jamaica 148 146 153 196Jordan 34 54 32 74

Mexico 17,503 17,363 17,220 18,086Panama 541 631 857 948

Peru 640 934 1,135 1,412Syrian Arab Republic 0 90 0 0

Severely indebted low-income 1,060 1,001 887 978

Moderately indebted low-income 2,004 1,941 2,025 2,1 15

Moderately indebted middle-income 26,216 27,327 30,387 36,594

Selected countriesb 30,368 32,225 34,439 38,473Chile 4,051 3,958 3,857 4,363

China 1,973 2,269 2,418 2,715Coombia 3,117 3,090 3,414 4,230

C6te d'lvoire 24 43 38 45Egypt 129 177 164 203

Hungary 533 486 590 713India 1,542 1,425 1,506 1,569

Indonesia 3,316 3,693 3,684 5,446Malaysia 1,395 1,903 2,388 2,371

Morocco 502 440 424 458Nigeria 299 258 162 245

Philippines 2,633 3,423 3,541 3,974Thailand 4,636 4,754 5,045 5,339

Turkey 1,539 1,848 2,126 2.267Uruguay 1,297 1,403 1,422 1,446

Venezuela 3,382 3,055 3,660 3,089

Offshore banking centers 28,848 30,736 30,433 36,727

Oil exporters 8,134 8,161 9,652 12.472DRS reporters 5,718 5,350 7,242 9,751

DRS reporters 91,548 96,168 99,472 108,056

0 indicates no loans n the period,Note: This table shows the latest available data from each major creditor country. See country c assifications as the end of this statistical appendix.a. Partly consolidated aggregate claims of banks and their worldwide operations.b. Most of these countries are also included in the indebted country groups,c. Consolidated claims of banks and their worldwide operations.Source: Deutsche Bundesbank, Zahlungsbilonzstaotisk; Banca d'italia, BolOetino Economico: De Nederlandsche Bank, Quarterly Bulletin; Banque Nationale Suisse, Les Bonques Suisses: Bank ofEngland, Statisbcol Abstroct, Part I: Federal Financial Instiutions Examination Council, U.S. Country Exposure Lending Survey.

May 1997 m


TABLE AS8 Maturities of bank claims on developing countriesUS$ millions

1996Q2

More thanLess than I year and less More thon Estimated Short term

Country group or countr,y 1995 Total I year than 2 years 2 years Unallocated short term (% of total)

All developing countries 694,767 724,507 381,045 50,886 244,867 47,709 33 1,334 46EastAsia and Pacific 183,188 202,879 1 19,857 13,1 86 57,809 12,027 107,959 53

EuropeandCentralAsia 143,314 147,826 65,126 15,073 56,6i3 11,014 50,290 34Latin America and the Caribbean 241,281 248,778 129,151 14,292 84,991 20,344 115,396 46

Middle Eastand NorthAfrica 61,133 59,502 32,560 4,295 21,820 827 27,655 46South Asia 22,074 23,189 11,692 1,308 8,584 1,605 10,349 45

Sub-Saharan Africa 43,777 42,333 22,659 2,732 15,050 1,892 19,685 47

Severely indebted middle-income 199,545 206,259 107,692 11,344 68,808 18,415 96,468 47

Argentina 39,181 39,475 21,047 2,543 12,050 3,835 18,829 48Bolivia 399 451 322 4 64 6 1 317 70

Brazil 57,391 63,359 36,469 3,027 17,554 6,309 33,053 52Bulgaria 3,007 2,679 554 187 1,457 481 292 11

Cuba 3,223 2,959 1,707 33 1,195 24 1,650 56Ecuador 2,780 3,09 1 1,483 68 1,307 233 1,406 45

Gabon 640 558 322 73 157 6 247 44Jamaica 644 758 281 32 220 225 231 30Jordan 1,138 981 528 97 252 104 471 48

Mexico 57,33 1 57,065 27,240 3,590 20,485 5,750 23,837 42Panama 27,723 27,246 1 1,860 1,423 12,705 1,258 10,453 38

Peru 5,617 7,065 5,534 267 1,144 120 5,340 76

Syrian Arab Republic 471 572 345 218 9 342 60

Severely indebted low-income 27,315 26,636 13,072 1,751 10,956 857 11,079 42

Moderately indebted low-income 22,093 23,031 1 1,867 1,317 8,483 1,364 10,518 46

Moderately indebted middle-income 238,096 247,855 119,443 22,493 90,965 14,954 97,986 40

Selected countriesa 277,697 297,701 164,219 20,603 94,704 18,175 144,897 49Chile 13,616 13,507 7,791 848 4,658 210 6,731 50China 48,399 50,649 24,527 4,148 17,780 4,194 20,926 41

Colombia 10,940 12,061 5,531 1,183 5,026 321 4,775 40

Cote d'lvoire 1,993 1,878 1,708 30 136 4 1,663 89Egypt 3,487 3,236 2,077 264 872 23 1,734 54

Hungary 9,104 8,456 2,955 602 3,293 1,606 2,201 26India 15,446 15,723 7,132 1,050 6,271 1,270 6,038 38

Indonesia 44,843 49,624 29,922 3,471 14,168 2,063 26,765 54Malaysia 16,759 20,070 9,910 833 6,843 2,484 8,763 44

Morocco 4,654 4,426 2,075 306 2,043 2 1,735 39Nigeria 2,826 2,537 1,089 225 1,129 94 726 29

Philippines 8,325 10,791 5,943 531 3,710 607 5,598 52Thailand 62,994 69,675 48,064 4,083 14,926 2,602 44,528 64

Turkey 18,623 20,121 10,118 2,027 6,740 1,236 8,157 41Uruguay 3,748 4,053 2,885 108 1,003 57 2,814 69

Venezuela 11,940 10,894 2,492 894 6,1 06 1,402 1,743 16

Offshore banking centers 658,672 615,345 477,742 17,826 87,723 32,054 461,5 10 75

Oil exporters 129,669 126,907 59,899 9,484 54,156 3,368 48,559 38DRS reporters 102,506 99,180 41,741 8,914 45,444 3,081 31,057 31

DRS reporters 654,381 691,704 388,682 42,189 208,822 52,0 11 348,278 50

Note: See country classifications at the end of this statistical appendix.a. Most of these countries are also included in the indebted country groups.Source: Bank for Internationa Settlements, The Maturity and Sectorol Distribution of lntemationcl Bank Lending.



TABLEA.9 Funds raised on international capital marketsUS$ millions

Country group or country 1993 1994 1995 1996 1995Q3 1995Q4 1996QI 1996Q2 1 996Q3 1996Q4

Al developing countries 64,326 63,632 73,934 125,506 25,175 21,429 34,319 29,263 32,901 29.024Bonds 47,520 39,867 40,888 95,276 16,155 13,695 28,954 20,515 24,213 21,594

International 33,812 30,519 25,959 71,71 1 10,445 8,086 23,899 13,124 18,278 16,410Foreign 13,708 9,348 14,929 23,565 5,711 5,609 5,055 7,39 1 5,935 5,184

Loans 16,806 23,765 33,046 30,231 9,020 7,734 5,365 8,748 8,688 7,430International 16,609 23,671 33,046 29,983 9,020 7,734 5,337 8,528 8,688 7,430

Foreign 197 95 - 248 - - 28 220 - -

East Asia and Pacific 18,894 27,126 25,452 33,151 9,026 7,037 5,973 7,654 10,741 8,783Europe and Central Asia 16,896 10,473 14,046 25,459 4,045 3,709 15.602 4,315 3,107 2,435

Latin America and the Caribbean 27,338 20,438 24,938 56,020 8,985 8,619 11,275 1 3,758 1 6,330 14,657Middle East and North Africa 457 2,074 2,869 2,882 842 1,108 245 220 784 1,633

South Asia 567 1,656 2,954 3,667 1,063 350 413 1,324 1,087 843Sub-Saharan Afrca 174 1,864 3,674 4,328 1,214 606 811 1,992 852 673

Severely indebted middle-income 22,674 18,363 20,835 47,863 7.914 6,369 9,378 11,925 14,322 12,238Argentina 6,473 5,716 6,983 14,487 2,190 2,876 3,443 3,613 2,393 5,038

Bolivia - 10 - - - - - - - -

Brazil 6,449 4,0 1 6,635 13,020 1,437 1,927 2,325 3,479 2,420 4,796Bulgaria - - _ _ _ _ _ _ _ _

Cuba - - - - - -Ecuador - - 10 - - 10

Gabon - - - - - - _ _ _ _Jamaica - - - - - - _ _ _ _Jordan - - 50 - 50 -

Mexico 9,751 8,526 6,957 20,253 4,187 1,556 3,610 4,833 9,509 2,301Panama - - 150 28 - - - - - 28

Peru - 100 50 75 50 - - - - 75Syrian Arab Republic - - -

Severely indebted low-income 84 557 563 560 158 160 560 - - -

Moderately indebted low-income 657 1,656 2,954 3,667 1,063 350 413 1,324 1,087 843

Moderately indebted middle-income 25,207 19,209 26,930 46,629 7,295 8,720 19,861 8,131 10,789 7,848

Selected countriesa 34,669 33,623 39,086 49,268 13,667 11,431 9,018 i2,664 14,706 12,880Chile 775 80 1,448 4,102 451 375 1,132 703 1,277 990

China 6,756 8,097 6,258 7,836 2,265 1,858 1,200 1,838 2,977 1,821Colombia 621 1,172 2,082 3,189 393 1,529 745 1,040 200 1,204

Cote dIlvoire - - - - - _ _ _ _ _Egypt - 18 58 - - 58 - - - -

Hungary 5,071 2,541 3,771 646 1,036 695 145 501 - -

India 475 1,461 2,263 3,112 966 350 413 892 1,064 743Indonesia 3,726 6,199 7,588 10,772 1,895 2,1 19 2,401 2,508 3,825 2,038Malaysia 1,611 3,526 3,205 3,347 2,252 703 300 667 - 2,380

Morocco - - 25 432 - - - - 399 33Nigeria - - - - - - - - - -

Philippines 1,250 1,164 1,272 3,779 333 599 147 945 1,589 1,098Thailand 5,550 7,910 6,634 7,417 2,246 1,298 1,925 1,696 2,350 1,446

Turkey 5,763 851 3,929 3,920 1,623 1,501 590 1,784 494 1,052Uruguay 140 203 206 100 206 - - - 100 -

Venezuela 2,931 400 346 616 - 346 20 90 431 75

OfFshore banking centers 9,476 8,574 4,939 6,206 1,153 1,354 1,622 1,380 1,686 1,518

Oil exporters 3,503 2,817 3,949 3,961 1,420 1,646 650 150 681 2,480DRS reporters 3,157 1,498 1,566 1,636 1,080 346 405 90 431 710

OECD countries 510,550 498,211 723,203 872,107 176,669 198,321 219,954 224.340 206,424 221,389Multilateral institutions 20,711 12,373 17,674 24,866 5,870 4,257 5,802 5,743 6,991 6,330

Totalb 595,651 574,679 815,361 1,024,917 207,714 224,307 260,304 259,535 246,566 258,513

-Not available.Note: See country classifications at the end of this statistical appendix.a. Most of these countries are also included in the indebted country groups.b. Includes all developing countries, offshore banking centers, OECD countries, mulitlateral institutions, and the category "other."Source: OECD, Finonciol Stotistcs Monthly, Port 1.

May 1997 g


TABLE A. 10 Secondary market debt (bid) pricesPercentoge offdce value

Country group or country 1994Q3 1994Q4 1995Q1 1995Q2 1995Q3 1995Q4 1996Q1 1996Q2 1996Q3 1996Q4 1997QI

Severely indebted middle-incomeArgentinaa 5 1 41 40 48 47 56 52 55 55 60 65

Brazilb 44 40 36 45 48 52 5 1 53 57 61 65

Bulgaria 45 45 42 50 5 1 53 50 52 51 53 60Ecuadorf 33 29 27 48 49 50 54 36 37 - 45

Jamaica 83 83 - 82 - - 76 74 77 81 83

Jordan 48 42 35 39 44 47 54 53 57 58 62Mexico 66 53 47 60 60 64 64 66 67 71 75Panama 59 53 - 53 59 - 45 48 48 51 56

Peru 60 56 51 61 68 71 - - - - 117

Other selected countriesAlbania 16 16 16 18 21 22 14 13 12 13 12Algeria 46 30 28 28 - - 46 55 - 61 71

Chile 95 95 - - - - - - - - -

Costa Ricad 66 66 - Sl 52 54 60 59 67 75 78C6ted'lvoire 19 18 15 15 16 16 20 19 19 26 37

Egypt 47 48 48 48 48 48 49 47 - 47 47Honduras 36 36 - 27 - - - 35 38 40 40

Mexicoe 66 53 47 60 60 64 64 66 67 71 75Nicaragua i 8 6 - 5 - 8 9 7 10 12 IS

Nigeria 39 39 37 43 44 48 52 53 56 63 68Philippinesf 1 65 59 59 73 74 74 79 80 81 87 88

Russiaa 39 28 22 32 33 34 34 42 61 76 81Venezuelae | 49 45 43 50 SI 59 56 60 65 79 76

-Not available.a. Guaranteed Refinancing Agreement (GRA). Prces after March 1993 refer to par bonds offered under the Brady initiative.b. Multi-Year Deposit Facility Agreement (MYDFA), Prices afterApril 1994 referto par bonds offered underthe Brady initiative.c. Multi-Year Refinancing Agreement (MYRA).d. Prices refer to Series A par bonds offered under the Brady initiative.e. Prices refer to par bonds offered under the Brady initiative.f. Public sector restructured debt, including Central Bank of the Phillipines. 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; lnternationol Financing Review; and World Bank data,



TABLE A. I i Emerging stock marketsMarket capitalization Value of stock traded Price-earnings ratio

(US$ millions) (US$ millions) (percent)

Economy 1996Q2 1 996Q3 1996Q4 1 996Q2 i 996Q3 1996Q4 1996Q2 i 996Q3 1 996Q4

Argentina 44,108 40,574 44,679 1,183 896 1,144 20.4 28.7 20.6Brazil 191,287 193,91 1 216,990 26,584 32,381 30,822 30.1 21.3 14.5Chile 72,713 70,253 65,940 2,146 1,894 1,720 16.3 16.1 17.3

China 72,473 85,990 113,755 40,637 70,735 140,304 12.7 12.8 40Colombia 14,981 15,660 17,137 366 392 327 9.5 10.2 13.3

Greece 23,717 24,733 24,178 1,498 1,902 2,798 9.4 9.9 16.2Hungary 4,239 4,631 5,274 334 390 582 35.5 20.4 22.9

India 150,671 133,746 122,605 8,061 8,053 6,165 16.8 13.5 13Indonesia 79,216 79,801 91,016 7,539 7,501 10,624 22.4 20.2 22.3

Jordan 4,209 4,383 4,554 64 72 98 12.9 14 14.9

Malaysiaa 271,290 281,269 307,179 42,137 37,727 42,979 27.7 26.4 26.9Mexico 110,700 113,670 1 03,138 13,617 8.628 7,982 1 0 15.5 16.1Nigeria 2,665 3,170 3,384 15 10 43 0 0 13.3

Pakistan 10,608 11,538 10,639 1,738 1,069 1,420 15 12.2 14.7Peru 13,653 15,170 12,292 844 1,020 710 17.4 19.5 15.3

Philippines 79,970 77,852 80,649 7,308 5,939 6,984 35.6 23 18.8Poland 8,014 8,644 8,390 1,374 1,220 1,123 1 1.4 14 14.3

Portugal 20,653 21,359 24,660 1,374 1,490 2,651 15.4 15.9 21.ISouth Africa 270,903 252,514 241,571 1,409 6,169 7,431 18.9 18.7 16.3

Sri Lanka 1,777 1,739 1,848 21 19 44 11.3 11.7 10.4

Taiwan (China) 232,878 235,069 273,608 167,171 103,278 141,003 26.9 26.6 31.3Turkey 28.967 27,677 30,020 8,050 5,402 11,233 9.8 10.6 15.5

Venezuela 5,343 6,869 10,055 242 278 524 33.7 37.7 9.5Zimbabwe 2,547 3,044 3,635 47 47 1 10 13 15.5 16.7

a. Data for Malaysian-incorportated companies only.Source: Intemational Finance Corporation, Emerging Stock Markets Foctbook.

May 1997 la


Country groupsEast Asia and the Pacific Georgia* Costa Rica* Jordan* Gabon*American Samoa Gibraltar** Cuba*' Libya** Gambia, The'Cambodia* Greece** Dominica* Morocco* Ghana'China' Hungary' Dominican Republic' Oman' Guinea'Fiji' isle of Man Ecuador* Saudi Arabia** Guinea-Bissau*Guam Kazakstan* El Salvador* Syrian Arab Republic* Kenya*Indonesia* Kyrgyz Republic* French Guiana Tunisia* Lesotho*Kiribati** Latvia* Grenada* Yemen* Madagascar*Korea, D.P.R. of** Lithuania' Guadeloupe Malawi*Lao P.D.R.* Macedonia, FYR of* Guatemala South Asia Mali*Malaysia* Malta* Guyana'* Afghanistan** Mauritania*Marshall Islands Moldova' Haiti* Bangladesh* Mauritius'Micronesia Poland' Honduras* Bhutan* MayotteMongolia' Portugal' Jamaica* India* Mozambique*Myanmar* Romania* Martinique Maldives* Namibia**New Caledonia** Russian Federation* Mexico* Nepal* Niger*

Papua New Guineae Slovak Republic* Nicaragua* Pakistan' Nigeria*Philippines* Slovenia* Paraguay* Sri'Lank ReunionSolomon Islands* Tajikistan* Peru* Sub-Saharan Africa Rwanda*Thailand' Turkey* Puerto Rico Angola' SBo Tome and Principe*Tonga' Turkmenistan* St. Kitts and Nevis* Benin* Senegal*Vietnam* Ukraine* St. Lucia* Botswana* Seychelles*Western Samoa* Uzbekistan* St. Vincent* Burkina Faso* Sierra Leone*

Suriname* Burundi* SomaliaEurope and Latin America and Trinidad and Tobago* Cameroon' South Africa**Central Asia the Caribbean Uruguay* Cape Verde* Sudan*Albania* Antigua and Barbuda* Venezuela* Central African Republic* Swaziland*Azerbaijan* Argentinae Tazani*

Belarus* Aruba Middle East Chad* Tanzania'

Bulgaria* Belize* and North Africa Comoros* TogoCroaiat Bolivia* Algeria' Congo* Uganda'Czech Republic* Brazil' Egypt, Arab Rep. of* C6te d'lvoire* Zaire*Estonia* Chile* Iran, Islamic Rep. of* Djibouti* ZmbiFormerYugoslavia* Colombia' 'a' Equatorial Guinea' Zimbabwe*

Ethiopia*

Severely indebted Severely indebted low- Madagascar Moderately indebted Colombiamiddle-income income countries5 Mali low-income countriesa Egypt, Arab Rep. ofcountries' Angola Mauritania Burkina Faso Greece**Argentina Afghanistan** Mozambique Bangladesh HungaryBolivia Burundi Myanmar Benin IndonesiaBrazil Cambodia Nicaragua Chad Macedonia, FYR ofBulgaria Cameroon Niger Comoros Morocco

Cuba** Central African Republic Nigeria Gambia, The Papua New GuineaEcuador Congo Rwanda Haiti PhilippinesGabon C6te d'lvoire Sio Tome and Principe India PolandIraq** Equatorial Guinea Sierra Leone Lao P.D.R. St. VincentJamaica Ethiopia Somalia Pakistan Russian FederationJordan Ghana Sudan Senegal Trinidad and TobagoMexico Guinea Tanzania Zimbabwe TunisiaPanama Guinea-Bissau Togo TurkeyPeru Guyana Uganda Moderately indebted UruguaySyrian Arab Republic Honduras Vietnam middle-income Venezuela

Kenya Yemen countriesa Western SamoaLiberia Zaire AlgeriaMalawi Zambia Chile

Offshore banking Cayman Islands Singapore Brunei Nigeria'centers5 Hong Kong Vanuatu* Congo* Oman'Bahamas Lebanon* Former Soviet Union* QatarBahrain** Liberia* Oil exporters Gabon* Saudi Arabia*'Barbados* Macao Algeria* Iran, Islamic Rep. of* Trinidad and Tobago*

Bermuda Netherlands Antilles Angola* Iraq** United Arab EmiratesPanama' Bahrain** Libyae* Venezuela'

DRS reporter, * Non-DRS economy. The remaining countries include selected high-income and non-OECD middle-income countries. The Debtor Reporting System (DRS), set up in1951 to monitor statistics on the external debt of developing countries, is maintained by the staff of the International Development Data Group of the World Bank's International EconomicsDepartment. The World Bank is the so e repostory for these statistics on a loan-by-loan basis.Note: Country group composition has been modified to reflect the annual updating of GNP per capita and related debt indicators.a. All countries in the group are DRS reporters, except those for which t is otherwise indicated.b. Offshore banking centers are not included in any other country group except for oil exporters.

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