The World Federation of Exchanges Hosts Emerging Markets Forum for Industry Stakeholders
London - March 15, 2019 (Investorideas.com Newswire) The World Federation of Exchanges ("WFE"), the global industry group for exchanges and central counterparties (CCPs), hosted a one-day Emerging Markets (EM) Forum to explore the themes arising from two of its recent reports on the factors that attract international investors to emerging markets.
While the WFE represents the world's largest exchanges and CCPs, nearly 70% of WFE members are located in emerging or frontier markets. Supporting the growth and development of these markets is a core strategic pillar and mandate of the Federation. This support takes a variety of forms, from conducting capacity building and holding information sharing workshops, creating best practices and standards, to undertaking empirically-based research about the optimal market structure. This work is led by the WFE's Emerging Markets Working Group (EMWG), which includes 28 members whose role it is to develop relevant learning and information-sharing sessions for EM exchanges, and to propose EM-relevant research topics.
The two most recent WFE research papers that formed the foundation of the EM Forum - 'Attracting international investors to emerging markets' from December 2018, and a second, qualitative report published in January 2019 entitled 'Investing in Emerging and Frontier Markets – An Investor Viewpoint' – are interconnected reports on the relationship between international investors and emerging markets. The event sought to explore the findings of the most recent research as well as earlier WFE EM reports, with the objective of identifying ways in which exchanges and policymakers can enhance the effectiveness of their markets.
Speakers at the forum included representatives from the UN Sustainable Stock Exchanges Initiative (SSE), the European Bank for Reconstruction and Development (EBRD), and Aviva, alongside many WFE members such as B3 (Brazil), Dubai Financial Market, London Stock Exchange Group and Shanghai Stock Exchange. The one-day event also featured a fireside chat between Alexander Afanasiev, Chairman of the Executive Board & CEO of Moscow Exchange (MOEX) and William J. Brodsky, Chairman, Cedar Street Asset Management, LLC.
Key takeaways from the event were:
- Future economic growth will come from emerging markets, not developed markets;
- Foreign investors help to diversify the investor base, bring liquidity, improve price discovery, and boost the credibility of a market;
- While infrastructure is important, having a healthy capital markets ecosystem is fundamental to attracting foreign investors;
- A vibrant, diversified local investor base makes the market more attractive for international investors;
- Support for emerging market exchanges needs to come from the top – political leaders/policymakers need to support the role of the exchange in enabling economic growth and development;
- International investors are concerned about corporate governance and how companies are managing ESG risks and opportunities – this applies to companies in both emerging and developed markets;
- Index investing is a huge driver of international investment into emerging markets. However, more needs to be done to drive investment into smaller Emerging and Frontier markets that are not necessarily included in such EM indices; and
- Emerging market companies (at least in some markets) are getting better at engaging with international investors and understanding the need for effective management of investor relations. At the same time, international investors need to understand cultural differences of the markets they invest in, and how these may impact investor engagement.
Nandini Sukumar, Chief Executive Officer, WFE said: "Our Emerging Markets Forum was an excellent, interactive day with spirited debate around the factors that attract, and in some cases, discourage, international investors from investing in EM. There can be no doubt as to how important and interlinked international investors are to the development of emerging market economies. We believe that exchanges and policy-makers can work in partnership to ensure the creation of enabling investor environments, which will, in turn, help emerging market exchanges fulfil their role in promoting long term economic growth and development. We would therefore urge industry stakeholders to use the practical guidance in the WFE EM reports as a starting point for this important development work."
About the World Federation of Exchanges (WFE):
Established in 1961, the WFE is the global industry association for exchanges and clearing houses. Headquartered in London, it represents over 200 market infrastructure providers, including standalone CCPs that are not part of exchange groups. Of our members, 37% are in Asia-Pacific, 43% in EMEA and 20% in the Americas. WFE exchanges are home to nearly 48,000 listed companies, and the market capitalisation of these entities is over $70.2 trillion; around $95 trillion (EOB) in trading annually passes through the infrastructures WFE members safeguard (at end 2018).
The WFE is the definitive source for exchange-traded statistics, and publishes over 350 market data indicators. Its free statistics database stretches back more than 40 years, and provides information and insight into developments on global exchanges. The WFE works with standard-setters, policy makers, regulators and government organisations around the world to support and promote the development of fair, transparent, stable and efficient markets. The WFE shares regulatory authorities' goals of ensuring the safety and soundness of the global financial system.
With extensive experience of developing and enforcing high standards of conduct, the WFE and its members support an orderly, secure, fair and transparent environment for investors; for companies that raise capital; and for all who deal with financial risk. We seek outcomes that maximise the common good, consumer confidence and economic growth. And we engage with policy makers and regulators in an open, collaborative way, reflecting the central, public role that exchanges and CCPs play in a globally integrated financial system.
For more information, please contact:
Head of Communications, The World Federation of Exchanges
Phone: +44 20 7151 4137 / 7850 287 685
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