Foreign investment in Asian stock markets

Foreign investment in the world’s stock markets has dramatically increased since the early 1990s. In 1993, the share of portfolio investment within capital inflows to developing countries overtook net foreign direct investment, commercial bank lending, grants and official debt flows to become the most significant item. It is anticipated that the importance of foreign portfolio investment for the developing world will continue to increase. At the same time, grants and overseas development assistance are being continuously reduced. Bank lendings are expected to be constrained owing to the inabilities of developing countries to service and absorb new debt. And industry faces declining prospects and necessity to take advantage of low wage opportunities withing developing world.