Institutional Investment in Central and Eastern Europe: Investment Criteria of Western Portfolio Managers
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چکیده
Transition of the former communist countries of Central and Eastern Europe (CEE) to functioning market economies creates new investment opportunities. A decade ago capital markets were almost absent in all CEE countries but they are developing rapidly. At the end of the 1990s institutional investors from Western countries are present in the equity and bond markets of the largest CEE economies. However, deficits in the economic and institutional setting still restrict foreign investment in CEE countries. This study examines the determinants of portfolio investment conducted by Western institutional investors in the Czech Republic, Estonia, Hungary, Poland and Slovenia as the five CEE candidates to the European Union. In addition, Russia is included as the largest country in Eastern Europe. The study focuses on the pull-factors of portfolio investment, i.e. analyzes the attractiveness of CEE capital markets from the perspective of Western investors. The analysis draws on data from a recent survey conducted among portfolio managers of Western investment funds, an increasingly important type of institutional investor. The approach of this study is twofold: First, criteria for portfolio investment and current barriers to higher investment in CEE countries are identified. Second, the CEE portfolio structure of Western investment funds is explained making use of detailed grading data from the survey. The results suggest that fund managers check a whole catalogue of criteria. Most important are stability of the financial and legal system, managerial competency and liquidity of the stock market. But liquidity as a prerequisite for instantaneous exit from any investment is re
منابع مشابه
Institutional investment in Central and Eastern Europe: investment criteria of Western portfolio managers
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