Moving towards the mainstream

Stock market development and performance
in the rapid-growth markets

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Background

The rise in equity capitalization in emerging markets

Equity markets in EM economies have surged over the last decade. After hovering around 20%–25% of GDP for most of the 1990s, EM’s stock market capitalization, as a share of collective GDP, more than doubled from 2000 to 2007.1

Stock market development in emerging markets, 1990–2012
(Emerging market capitalization ratio)

Emerging market capitalization ratio

Source: WorldDevelopmentIndicators, World Bank (IEMS calculation), 2012.
Note: Based on averages of a sample of 69 EM countries.


The total market capitalization of EM countries has increased around tenfold over the past 15 years, from less than US$2 trillion in 1995 to about US$5 trillion in 2005, and around US$13 trillion by the end of 2011. Over the same period, total market capitalization in the developed markets has only doubled.

Even if EM capitalization only grows in line with GDP, as early as 2020 it could account for almost half the world’s total, and as much as half by 2030.

Emerging market stock market capitalization
(Percentage of global stock market capitalization, end of year)

Emerging market stock market capitalization

Source: WorldDevelopmentIndicators, World Bank (IEMS calculation), 2012.


1.Market capitalization is the total value of the tradable shares of a publicly traded company; it is equal to the share price times the number of shares outstanding.

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