Still, some useful insights about their progress in becoming developed marketplaces for capital can be inferred from aggregate figures on listing activity, trading activity, and new issue activity. The standard quantitative indicators of stock market development were up in most emerging markets in 1996, and also up in the aggregate. The decline is due almost entirely to decreases in new issue activity in Korea and India during 1996. The fact that trading in emerging market stocks' home markets increased in 1996, even as more companies chose to issue ADRs and as substantial amounts of trading activity likely shifted to U.S. and other international money center exchanges, indicates an increase in emerging market stocks' liquidity on a global basis. This indicates that for these markets, at least, overall trading volumes remained equal to last year.
Progress here is very sensitive to individual market conditions and thus difficult to generalize.
But the apparent trend on the part of emerging market companies, brokerage firms, stock exchanges, and regulators is toward increased accommodation to the legitimate demands of domestic and international investors. Other indicators of market development are the increasing range of financial products and services available in emerging markets and from international sources. International portfolio flows to emerging markets and emerging market stocks picked up in 1996, according to many sources. This represents the first increase in annual flows since 1993. While other sources differ as to the amounts of the flows, they agree that 1996 saw a major increase after two years of no growth in net new cash flows.