Narrow Your Choices

Refine By Countries

Refine By Series

Refine By Language

Refine By Date

—

Refine By IMF Taxonomy

Refine By JEL Taxonomy

Refine by LOC Taxonomy

Refine By THEMA Taxonomy

  • Print
  • Save

Business and Economics > Investments: Stocks

You are looking at 1 - 10 of 74 items for :

  • Type: Journal Issue x
  • International Lending and Debt Problems x
Clear All Modify Search
Cover IMF Working Papers
IMF-Supported Programs in Low-Income Countries: Fragile versus Non-Fragile States
Edouard Martin
and
Felix J Vardy
This paper examines the macroeconomic frameworks of IMF-supported programs with low-income countries from 2009 to 2022, focusing on how macroeconomic targets and their achievement differ between fragile and conflicted-affected states (FCS) and non-FCS. Key findings include similar program targets for FCS and non-FCS, optimism in all dimensions considered other than inflation, and no significant correlation between targets and outcomes. For variables other than inflation, country-independent targets equal to the mean or median outcomes of other programs outperform program projections as predictors of actual outcomes. This underscores the challenges in setting realistic, country and program-specific targets in IMF-supported programs with low-income countries. Finally, we discuss potential caveats, including GDP rebenchmarking, non-linear relationship between initial conditions and targets, and repeat programs. We do not study, and make no claims about, causality.
Keywords:
IMF Programs; LICs; Fragility; Tailoring; Optimism; appendix H. country classification; fragile and conflicted-affected states; histogram of program approval; growth optimism; IMF country team; FCS classification; Pb XOXG; FCS program; Inflation; Fiscal stance; Wages; Debt reduction; Stocks; Sub-Saharan Africa; Global
Cover IMF Working Papers
Measuring Multinational Production with Foreign Direct Investment Statistics: Recent Trends, Challenges, and Developments
Bruno Casella
,
Maria Borga
, and
Mr. Konstantin Wacker
In a complex global production landscape, the quest for measures of economic activity by multinational enterprises (MNEs) has become more pressing. Foreign Direct Investment (FDI) statistics, which capture financing aspects of MNEs, have often been used as a proxy for multinational production given their wide availability and cross-country comparability, but concerns that multinational production occurs in different countries than where financial positions are recorded call this practice into question. This paper revisits the main objections to the use of FDI as a proxy for multinational production, explores counterarguments, and provides guidance on the use of FDI statistics to measure multinational production.
Keywords:
FDI; multinational production; multinational enterprises; foreign affiliates; FDI statistics; FDI data; conduit FDI; FDI stock; Foreign direct investment; Special purpose vehicle; Stocks; Offshore financial centers; Global
Cover Selected Issues Papers
Revamping the West African Economic and Monetary Union (WAEMU) Fiscal Framework
Can Sever
and
Athene Laws
This paper aims to provide a broad perspective on the WAEMU fiscal framework. Based on backward looking exercises and forward looking scenarios, it shows that (i) repeated fiscal slippages and historically large stock flow adjustments contributed to the surge in the WAEMU public debt, and (ii) stock flow adjustments can have significant effects on the WAEMU debt dynamics going forward. This paper also discusses that it is essential and urgent to reintroduce the fiscal rules and the Convergence Pact and to enhance the rules. Revamping the fiscal rules should focus on introducing a correction mechanism (which could contain surges in debt in the future) and an escape clause (which would enhance fiscal discipline and predictability), as well as capturing the extensive extra-budgetary and below-the-line operations and strengthening the enforcement mechanism. Any consideration to changing the fiscal deficit target should also encompass addressing extra-budgetary and below-the-line transactions (for example by changing the definition of the deficit). It is not appropriate to increase the debt ceiling.
Keywords:
Fiscal policy; fiscal rules; fiscal governance; PFM; fiscal coordination; monetary unions; WAEMU; stock flow adjustments; flow adjustment; debt dynamics scenario; deficit target; scenario assumption; deficit measure; deficit combination; so called SFA; Government debt management; Debt sustainability analysis; Debt limits; Global
Cover IMF Working Papers
Determinants of and Prospects for Market Access in Frontier Economies
Luiza Antoun de Almeida
and
Ms. Diva Singh
In recent years, we have observed an increase in low-income countries’ (LICs) access to international capital markets, especially after the Global Financial Crisis (GFC). This paper investigates what factors—country-specific macroeconomic fundamentals and/or external variables—have contributed to the surge in external bond issuance by these LICs, which we refer to in our paper as ‘frontier economies’. Using data on public and publicly guaranteed (PPG) external bond issuance, outstanding PPG bond stock, as well as sovereign spreads, we employ panel data analysis to examine factors related to the increase in issuance by these economies as well as the reduction in their spreads over time. Our empirical study shows that both country-specific fundamentals (such as public debt, current account balance, level of reserves, quality of institutions) and external variables (such as US growth and the VIX index) play a role in explaining the increased amount of issuance and the decline in spreads of frontier economies’ sovereign bonds. The impact of some of these variables on issuance appears to reflect a country’s need to issue bonds for external financing (‘the supply side’ of bond issuance), while others appear to correlate more through their impact on investors’ appetite for a country’s debt (‘the demand side’). In addition, the impact of country-specific variables can also be affected by external factors such as global risk appetite. Our analysis of key factors that have contributed to increased market access for frontier economies over the past decade provides important information to gauge the prospects for their continued market access, and for other LICs to join this group by tapping international markets for the first time.
Keywords:
frontier economy; market access; PPG bond stock; PPG issuance; data on public and publicly guaranteed; Bonds; International capital markets; Public and publicly-guaranteed external debt; Emerging and frontier financial markets; Stocks; Global
Cover IMF Staff Country Reports
Republic of Mozambique: Technical Assistance Report on Public Sector Debt Statistics Mission (October 19-30, 2020)
International Monetary Fund. Statistics Dept.
This technical assistance (TA) mission on Public Sector Debt Statistics (PSDS) was conducted during October 19-30, 2020. The main purpose of the mission was to review the progress made by the authorities in implementing previous TA recommendations and provide further support to strengthen the compilation and dissemination of GFS in line with international standards set out in the Government Finance Statistics Manual 2014 (GFSM 2014).
Keywords:
Government Finance Statistics Public sector debt statistics Expenditure Public Sector; government finance statistics compilation committee; debt stock; International Monetary Fund Washington, d.c; State shareholdings management Institute; authorities of Mozambique; Public sector; Securities; Stocks
Cover IMF Staff Country Reports
Somalia: Enhanced Heavily Indebted Poor Countries (HIPC) Initiative-Decision Point Document
International Monetary Fund. Middle East and Central Asia Dept.
This paper presents an assessment of Somalia’s eligibility for assistance under the enhanced Heavily Indebted Poor Countries (HIPC) Initiative. The macroeconomic framework reflects the policy framework underlying the proposed three-year Fund-supported program. The debt relief analysis (DRA) remains largely unchanged, but some of the underlying debt data has been updated to reflect new information from creditors. In addition, this paper presents an assessment of debt management capacity in Somalia and a full Debt Sustainability Analysis under the Debt Sustainability Framework for Low-Income Countries. The DRA reveals that, after traditional debt relief mechanisms are applied, Somalia’s debt burden expressed as the net present value of debt-to-exports ratio is 344.2 percent at the end of December 2018—significantly above the HIPC Initiative threshold. Despite the challenging environment, progress on reform and policy implementation has been good and sustained reforms have translated into economic results. In addition to the coordinated support from the World Bank and the IMF, reforms have been supported by other development partners.
Keywords:
ISCR; CR; debt; Somalia; government; MDRI debt relief from IDA; HIPC debt relief analysis; HIPC Completion point; IMF in Washington; HIPC decision point; arrears clearance; burden indicator; Debt relief; Arrears; Debt service
Cover IMF Staff Country Reports
Somalia: Enhanced Heavily-Indebted Poor Countries (HIPC) Initiative-Preliminary Document
International Monetary Fund. Middle East and Central Asia Dept.
This Enhanced Heavily Indebted Poor Countries (HIPC) Initiative Program’s preliminary document discusses that as per the agreement by the IMF, Somalia can be eligible for debt relief under the Enhanced HIPC Initiative. It provides a clear recognition of Somalia’s sustained commitment to key economic and financial reforms under consecutive staff-monitored programs with the IMF. Helping Somalia achieve debt relief and unlock access to the needed resources to increase growth and reduce poverty is a key priority for the IMF. Once Somalia has reached the Completion Point, it would qualify for unconditional debt relief under the HIPC Initiative, and for debt relief under the Multilateral Debt Relief Initiative (MDRI) from the World Bank's International Development Association and the African Development Fund, together with beyond-HIPC assistance from the IMF. Paris Club creditors are also expected to provide further beyond-HIPC assistance at the Completion Point. With HIPC, MDRI and beyond HIPC assistance, Somalia’s NPV of debt-to-exports ratio is projected to decline from 491.7 percent in 2018 to 57.0 percent in 2027 and 41.5 percent in 2038.
Keywords:
ISCR; CR; authority; Enhanced HIPC Initiative; public finance management; reform agenda; reform; Somalia's eligibility; Somali authorities; sustained commitment; Club creditor; Debt relief; Arrears; Debt service; Debt service ratios; Stocks
Cover IMF Working Papers
Drivers of Cross-Border Banking in Sub-Saharan Africa
Mr. Paul Henri Mathieu
,
Mr. Marco Pani
,
Shiyuan Chen
, and
Mr. Rodolfo Maino
Using data collected from pan-African banks’ (PABs), balance sheets and other sources (Orbis, Fitch), this study identifies some key patterns of cross-border investment in bank subsidiaries by key banking groups in sub-Saharan Africa (SSA) and discusses some of the determinants of this investment. Using a gravity model relating the annual value of a banking group’s investment in the net equity of its subsidiaries to a set of explanatory variables, the analysis finds that cross-border banking is in part driven by a search for yield, diversification, and expansion for strategic reasons.
Keywords:
WP; break; center; exchange rate; Cross-border banking flows; Bank leverage; Global banks; Group profitability; banking group variable; Group size; vis-à-vis intra-group; net equity; host country pair; bank subsidiary; pan-African banking groups; Exchange rates; Cross-border banking; Inflation; Stocks; Gravity models; Africa; Sub-Saharan Africa; Global; West Africa; North Africa
Cover IMF Working Papers
Evolution of the Global Financial Network and Contagion: A New Approach
Ms. Yevgeniya Korniyenko
,
Manasa Patnam
,
Rita Maria del Rio-Chanon
, and
Mason A. Porter
This paper studies the interconnectedness of the global financial system and its susceptibility to shocks. A novel multilayer network framework is applied to link debt and equity exposures across countries. Use of this approach—that examines simultaneously multiple channels of transmission and their important higher order effects—shows that ignoring the heterogeneity of financial exposures, and simply aggregating all claims, as often done in other studies, can underestimate the extent and effects of financial contagion.The structure of the global financial network has changed since the global financial crisis, impacted by European bank’s deleveraging and higher corporate debt issuance. Still, we find that the structure of the system and contagion remain similar in that network is highly susceptible to shocks from central countries and those with large financial systems (e.g., the USA and the UK). While, individual European countries (excluding the UK) have relatively low impact on shock propagation, the network is highly susceptible to the shocks from the entire euro area. Another important development is the rising role of the Asian countries and the noticeable increase in network susceptibility to shocks from China and Hong Kong SAR economies.
Keywords:
WP; UK shock; equity; FDI equity; FDI-equity layer; USA banking shock; Financial contagion; spillovers; network analysis; PageRank centrality measure; bank funding; Foreign direct investment; Stocks; Portfolio investment; Commercial banks; Global; Europe
Cover IMF Working Papers
Assessing Default Risks for Chinese Firms: A Lost Cause?
Daniel Law
and
Mr. Shaun K. Roache
Assessing default risks for Chinese firms is hard. Standard measures of risk using market indicators may be unreliable because of implicit guarantees, the large role played by less-informed investors, and other market imperfections. We test this assertion by estimating stand-alone 1-year default probabilities for non-financial firms in China using an equity-based structural model and debt costs. We find evidence that the equity measure of default risk is sensitive to a firm’s balance sheet health, profitability, and ownership; specifically, default probabilities are higher for weaker, less profitable, and state-owned firms. In contrast, measures based on the cost of debt seem largely detached from fundamentals and instead determined by implicit guarantees. We conclude that for individual firms, equity-based measures, while far from perfect, provide a better measure of stand-alone default risks than borrowing costs.
Keywords:
WP; default probability; book value; growth industry; current liabilities; macroeconomic variable; equity market data; A-rated firm; firm default; Asset valuation; Debt default; Credit ratings; Credit risk; Stocks; Global; North America