The Inefficient Stock Market or Global Development Finance 2004

The Inefficient Stock Market: What Pays Off and Why

Author: Robert A Haugen

Sparked with wit and humor, this clever and insightful book provides clear evidence that the stock market is inefficient. In the author's view, models based on rational economic behavior cannot explain important aspects of market behavior. The book tackles important issues in today's financial market in a highly conversational and entertaining manner that will appeal to most readers. Chapter topics include: estimating expected return with the theories of modern finance, estimating portfolio risk and expected return with ad hoc factor models, payoffs to the five families, predicting future stock returns with the expected-return factor model, super stocks and stupid stocks, the international results, the topography of the stock market, the positive payoffs to cheapness and profitability, the negative payoff to risk, and the forces behind the technical payoffs to price-history. For anyone who wants to learn more about today's financial markets.

Interesting textbook: The Complete Lincoln Douglas Debates of 1858 or Community Practice

Global Development Finance 2004: The Changing Face of Finance: Analysis and Statistical Appendix

Author: World Bank Group

The external financing environment facing developing countries has brightened. In 2003, as global growth gained momentum, prices for key commodities rose, financial markets recovered, interest rates remained low, and private capital flows to developing countries increased to $200 billion -- their highest level in five years. Harnessing these gains to promote long-term investment and growth is the key theme of Global Development Finance 2004. Much of the developing world still has difficulty accessing the international capital markets. International investment in developing-country infrastructure has declined dramatically since 1997 and -- with the exception of trade finance -- private capital flows remain heavily concentrated in specific countries and regions. Although official aid flows have increased, they remain well below the levels required to meet the Millennium Development Goals.

In several developing countries, there has been a large scale build-up in official reserves, much of which has been invested in the financial markets of advanced economies, especially the United States -- epitomizing the diverse landscape of contemporary development finance, as well as intricate linkages between exchange rates, trade and capital flows, and the growing interdependence between developed and developing countries. Global Development Finance 2004, I: Analysis and Summary Tables is the World Bank's annual review of recent trends in and prospects for financial flows to developing countries. It highlights sources of vulnerability and risk in the recovery in private flows, notably the likely increases in interest rates in the advanced economies, volatility in major currencies and financial markets stemming from large global current-account imbalances, and fears of policy slippages in macroeconomic management in developing countries. It also contains the World Bank's assessment of the global outlook in light of the recent economic recovery.

Global Development Finance 2004, II: Summary and Country Tables includes a comprehensive set of tables of data for 136 countries that report under the World Bank Debtor Reporting System, as well as summary data for regions and income groups. It contains data on total external debt stocks and flows, aggregates, and key debt ratios, and provides a detailed, country-by-country picture of debt. Global Development Finance 2004 debt data are also available on CD-ROM, with more than 200 historical time series from 1970 to 2002, and country group estimates for 2003. With analysis and data spanning from short-term trade to long-term infrastructure finance, Global Development Finance 2004 is unique in its breadth of coverage of the issues related to international development finance. By providing a comprehensive review of recent trends in and prospects for all development-related flows (including debt, equity, official aid, and workers' remittances), Global Development Finance 2004 enables government officials, economists, investors, financial consultants, academics, and policymakers in the development community to better understand, manage, and promote the key challenge of financing development in today's globalized environment.

Table of Contents:

	Foreword	xi
	Acknowledgments	xiii
	Selected Abbreviations	xv
	Overview and Policy Messages: Harnessing Cyclical Gains for Development	3
Chapter 1	The Global Upturn and the Need for Adjustment	13
	Adjustment, recovery, and imbalances in the high-income countries	15
	Developing countries: a favorable outlook, but risks remain	20
	Regional prospects	25
	Advanced-economy policies and the outlook for development finance	33
	Note	34
	References	34
Chapter 2	Private Debt Finance for Developing Countries	37
	Conditions affecting the supply of funds	38
	Conditions affecting the demand for funds	41
	Ongoing structural change in financing	44
	Bond flows responded strongly to the external environment and domestic conditions	45
	Bank lending picked up	52
	Progress in reforming the international financial architecture	58
	Prospects for private debt flows	63
	Notes	63
	References	64
Annex	Commercial Debt Restructuring	65
Chapter 3	Shifting Forms of Equity Finance for Developing Countries	77
	Trends in FDI flows in 2003	78
	The shifting composition of FDI toward services	82
	Trends in portfolio equity flows to developing countries	90
	Why portfolio equity flows are so much smaller than FDI and debt flows	94
	Prospects for 2004-2005	96
Annex A	FDI Forecasting Model	100
Annex B	Top 25 International Equity Deals in 2003	101
	Notes	102
	References	103
Chapter 4	The Changing Landscape for Official Flows	107
	Recent trends in official flows	108
	Prospects for a rise in official aid	110
	Strategic considerations and aid flows	113
	Progress in raising aid effectiveness	115
	The Heavily Indebted Poor Countries Initiative	119
	The growing importance of international civil society in development	119
	Notes	123
	References	124
Chapter 5	Financing Developing Countries' Trade	127
	Evolution in the sources, magnitude, and methods of trade finance	128
	Access of less creditworthy borrowers to trade finance	137
	Trade finance in times of crisis	140
	Notes	144
	References	145
Chapter 6	The Challenge of Financing Infrastructure in Developing Countries	149
	The changing balance between the public and private sectors	151
	Recent developments in private external financing	154
	Unlocking the potential of the global capital markets	161
	Notes	165
	References	166
Appendix A	Enhancing the Developmental Effect of Workers' Remittances to Developing Countries	169
Appendix B	Summary Statistical Tables	175
	Tables
1	Net capital flows to developing countries, 1997-2003	4
2	Net private capital flows to developing countries, 1997-2003	8
1.1	Global outlook in summary, 2002-2006	14
1.2	Financing of U.S. current account deficit, 1999-2003	18
1.3	Export revenues of developing countries, 2000-06	22
1.4	Developing-country growth, 1991-2006	24
1.5	Growth in Europe and Central Asia, 1991-2006	25
1.6	Growth in South Asia, 1991-2006	27
1.7	Growth in East Asia and Pacific, 1991-2006	28
1.8	Growth in Sub-Saharan Africa, 1991-2006	29
1.9	Growth in the Middle East and North Africa, 1991-2006	30
1.10	Growth in Latin America and the Caribbean, 1991-2006	33
2.1	Net debt flows to developing countries by region, 2000-03	37
2.2	Gross market-based debt flows to developing countries, 2000-03	38
2.3	Declining severity of contagion over time	40
2.4	Selected indicators of debt burden, 1997-2003	44
2.5	Net bank flows to developing countries, 2001-03	52
2.6	Average spreads on medium- and long-term announced loans, 1999-2003	53