Nowe rynki papierów wartościowych a lekcje z historii
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Date
1996
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Publisher
Wydział Prawa i Administracji UAM
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Emerging stock markets: some lessons from history
Abstract
Many stock markets develop in step with the country's economy. Of course there is likely some
two-way causation between developments in the economy and stock markets. In the U.S., before
the 1930's there was relatively little Federal control over stock markets, and stock markets evolved
in a more or less satisfactory way.
Swedish stock markets evolved over 100 years in a remarkable manner that may be applicable
to an emerging stock market that government gives room to evolve. In the early 1890s, stocks
traded once a month through one broker. In the later part of the decade another broker entered
and trading occurred twice a month. No stock traded in every month during the decade, and the
median and mean number of trades was one for stocks that traded at all. By the late teens of the
twentieth century, the market had evolved to where a stock market index was meaningful. In the
post second world war period, Swedish turnover taxes drove much trading to London for big firms
and large trades. Bad government policy can hurt the evolution of emerging stock markets.
Much interest in emerging stock markets arises from high returns and low correlation with
developed-country markets. The belief in high returns and low correlations arises from data from the late 1980s and early 1990s. These patterns are unlikely to repeat. The benefits of diversification
look substantially smaller when data from the 1890s on are examined, primarily because of the
disasters of the first and second world wars. Emerging market economies should not count on continued
outside interest that result from overestimation of the benefits of international diversification.
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Digitalizacja i deponowanie archiwalnych zeszytów RPEiS sfinansowane przez MNiSW w ramach realizacji umowy nr 541/P-DUN/2016
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Citation
Ruch Prawniczy, Ekonomiczny i Socjologiczny, 58, 1996, z. 4, s. 151-162