Barriers to the Development of Small Stock Markets: A Case Study of Swaziland and Mozambique

Journal of International Development, Forthcoming

24 Pages Posted: 23 Aug 2008 Last revised: 20 May 2009

See all articles by Jenifer Piesse

Jenifer Piesse

University of Stellbosch; King's College London - Department of Management

Bruce Allen Hearn

University of Sussex

Date Written: August 20, 2008

Abstract

The establishment of a successful stock market in a developing economy can provide a major source of development finance both by channelling domestic savings and attracting foreign investment. However, this objective is not always met, particularly in very small markets. A case study of Swaziland and Mozambique illustrates that any potential gains to the domestic investment community are limited if the political economy does not allow the markets to develop sufficient liquidity. This paper finds that neither market is able to provide investors with risk diversification opportunities for portfolio investment.

Keywords: Sub-Saharan Africa, Swaziland, micro-markets, regional integration

JEL Classification: O16, O55

Suggested Citation

Piesse, Jenifer and Hearn, Bruce Allen, Barriers to the Development of Small Stock Markets: A Case Study of Swaziland and Mozambique (August 20, 2008). Journal of International Development, Forthcoming. Available at SSRN: https://ssrn.com/abstract=1242444

Jenifer Piesse

University of Stellbosch

Stellenbosch, Western Cape
South Africa

King's College London - Department of Management ( email )

Virginia Woolf Building
22 Kingsway
London, England WC2B 6NR
United Kingdom

Bruce Allen Hearn (Contact Author)

University of Sussex ( email )

Sussex House
Falmer
Brighton, Sussex BNI 9RH
United Kingdom

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