US, UK, Japan largest investing countries: IMF survey
WASHINGTON: Portfolio investment holdings of equity and long-term debt
securities by the United States, Britain and Japan accounted for almost 68
per cent of such holdings amounting to nearly $5.2 trillion at the end of
1997, the first survey of portfolio holdings organised by the International
Monetary Fund (IMF) shows.
hile the US, Britain and Japan were the largest investing countries,
according to the Coordinated Portfolio Investment Survey, the shares of the
Netherlands, Italy and France were each within four per cent to six per cent
of the total.
he survey is the first major internationally coordinated statistical
initiative designed to gauge portfolio claims on individual countries by the
world's principal investing nations. Some 29 countries participated.
he survey enabled identification of previously uncovered portfolio
investment holdings totalling $750 billion. The newly identified assets were
largely attributable to investors resident in European and North American
countries and were derived from completely new collections (for example,
Canada, Ireland, Italy, and Spain) and an updated benchmark survey in the
United States.
ermuda, the only offshore financial centre participating in the survey,
accounted for $133 billion. The survey also permitted the identification of
previously unmeasured liabilities of some $500 billion, mostly related to
offshore financial centres (about 45 per cent of the newly identified
liabilities) and emerging market countries (about 36 per cent).
s a result of these adjustments, it could be estimated that outstanding
portfolio investment liabilities in both equity and long-term debt
securities were $9.4 trillion at the end of 1997 and outstanding portfolio
investment asset positions were $7.7 trillion, says the IMF.
n principle, however, world portfolio investment assets should equal world
portfolio investment liabilities. In practice, a discrepancy remains.
Notwithstanding the improved coverage of portfolio investment assets
resulting from the survey, there remained a difference of $1.7 trillion
representing about 18 per cent of total liabilities, which is largely
attributable in the considerable growth in portfolio investment channelled
through offshore financial centres that did not participate in the survey.
y providing a snapshot of where portfolio assets are held and a basis for
cross-country comparison, the results of the survey are a step towards
providing a foundation for deeper analysis of potential vulnerabilities
among nations that rely heavily on portfolio investment flows to sustain
economic growth.
The survey represented for the majority of the participating countries, the
first time that such data were collected in accordance with standardised
definitions and methodologies," said Carol Carson, director of the IMF's
Statistics Department which is spearheading the survey.
This approach enhanced data quality and comparability. Only two-thirds of
these countries already compiled an international investment position
statement, mostly without any geographic details," she said.
n order to meet the requirements of the survey, major changes and
refinements were introduced by most compilers, even those who already
collected stock data attributed geographically. Overall, the survey covered
portfolio investments made by more than 4,000 banks, 8,000 non-bank
financial institutions and 13,000 non-financial enterprises.
The size of the global discrepancy between portfolio investment assets and
liabilities remained substantial," said Carson. This could be attributed to
the lack of data sources for offshore financial centres and some countries,
for which no estimate could be made, and a lack of coverage of holdings of
portfolio investment assets by households.
follow-up survey is being planned for end-December 2001, which will include
short-term portfolio investment positions. Efforts are also under way to
ensure a broader participation by countries and offshore financial
centres.(India Abroad News Service)
For reprint rights: Times Syndication Service
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