Professor Martin J. Siegel
EMERGING FINANCIAL MARKETS
C15.0023 - Fall 2002
Reading List
Class 1
Welcome to My World
Required:
Merrill Lynch: The Dual Listings
Optional:
FT: Mastering Investment: Welcome to Mastering Investment
Although
not on E.M. - an interesting investment overview article
Goldman Sachs:
Equities Division - Job Opportunities
Positions
in the equity department - defined.
Class 2
Investment Opportunities in Emerging Markets
Required:
Optional:
- Salomon: Portfolio Strategist: Invest in Emerging Markets Now?
- International Portfolio Investments - Chapter 11
- FT: The new language of emerging markets
- Goldman Sachs: Strategy Focus: Global Portfolio Strategy
- Thai Stocks: Diversification benefits are more powerful than meets the eye
Internet information on Russia: Russia on the web
Class 3 - Emerging Markets: Speculative Boom or Long Term Investment
Optional:
- NY Times: Futures Shock (a book review... which discusses Tulipomania and other "bubbles")
Patel: Stock Market Crisis in Developed and Emerging Markets (a more detailed analysis of EM Crisis for those who want to look deeper into it)
Why Diversify a Portfolio
Required:
- Salomon Brothers: Reasons for Global Investing
Optional:
- JP Morgan: Fixed Income Research: Diversifying into Emerging Markets 3/14/97
- Definitions from the Internet: Efficient Frontier, MPT, etc.
- FT: The Logic that Lies behind Overseas Diversification 5/28/01
- FT: Insights from Portfolio Theory 6/4/01
- FT: An Open and Shut Case for Portfolio Diversification 7/16/01
WSJ: Are Markets Efficient 12/28/00
Class 4
The Problems with Emerging Market Investing
Optional:
- WSJ: A Night of Horrors in Jakarta
- Bloomberg: CSFB, Others Face Harrowing Escape from Indonesia
- Siegel: Regent Hotel (Indonesia) Notice to Guest -- May 1998 (random notes I accumulated to my trip to S/E Asia in May 1998)
- FT: The New Language of Emerging Markets: November 9, 2000 (a really good article discussing how different it is to do business in different parts of the world)
- FT: Room for Improvement in Emering Markets: July 1, 2001 [ table one & figure one ]
FT: Survey: Global Custody: In for the Long Term: Emerging Markets (problems faced in the EM for the global custodian)- NYT: Safire: Bloomberg News Humbled: Nepotism in Singapore 8/29/02
Class 5
Globalization -- The Lexus and The Olive Tree
Optional:
- Business Week: Global Capitalization: Can it be made to work better ("The truth is that market liberalization by itself does not life all boats, and in some cases, has caused severe damage" ... an interesting article)
- Friedman: Altered States NY Times 27, 2000
- Economist: Is Globalisation Doomed? Globalization and its Critics 9/29/01 (a long, but excellent discussion of globalisation)
- Economist Globalization: The Joys of Global Investment ("by the turn of the century... the developing world... will account for over 60% of everything the world produces"...)
Debating Globalization: Jihad vs. McWorld
Class 6
Active Management of the Portfolio: ADRs, GDRs, Local Shares
Required:
- Siegel: Additonal Thoughts on A.D.R's (additional notes from my files)
- Siegel Notes: Investing in markets when the local market is closed to foreign investors:
Optional: News Articles on ADRs
- FT: ADR's a hit among the acquiring classes 4/16/01
- FT: Global Shares face a long uphill battle 5/31/00
- FT: Spain Faces court case on "golden shares"
- FT: ADRs mistake cost buyers $6 Million 6/8/01
FT: Regulatory Fears put brake on Indian ADR plan- NYTimes: Nasdaq Debut of Chinese Stocks Dampens Internet Fever
Class 7
In Emerging Markets Why Diversify with Equity
Top Down/Bottom Up - An Investment Strategy
Required:
- NY Times: Krystof: Who Went Under in the Worlds Sea of Cash (an excellent article on Global Contagion) Part One | Part Two
- Siegel: Business Plan - November 18, 1998 (my business proposal to manage equity money in Emerging Markets)
- Siegel: Asian Trip: May 10, 1998 (my report to the Risk Management Committee after a trip to S.E. Asia in 1998)
Optional:
Emerging Markets Quarterly: What Matters for Emerging Market Investments (a report that is a bit out of date (1997) but has a good technical discussion on asset pricing theory and risk measurements)
Anna Quindlen- Thoughts For Life
Class 8
Active Management of the Portfolio
Required:
- Van Agtmael: Active Management of an Equity Portfolio -- Top Down/Bottom Up (a presentation to my class in November 2000)
Optional: How Others actively Manage International Money
Optional: Relative News Articles
- FT: Asian Investors Learn to Fight for Rights
- FT: Developing strategy for a not-so-global village ("global economic convergence is a myth, making data gathering in EM essential")
FT: How to read those annual reports (a brush up for those who may have forgotten)
Class 9
The Index Approach to Emerging Markets
Required:
- Morgan Stanley: Introduction to the M.S.C.I.
- Morgan Stanley: Equity Index Methodology - Overview
- Goldman Sachs: The New MSCI Indexes: Highlights and Implications
Optional:
- Global Finance: Morgan Stanley Redraws the World
- FT: Indexing in Well Served-Up Slices (finding index info on the web -- indexfunds.com)
- FT: Index-Based Investing: An Industry enjoying life in the Fast Track (" a once derided form of investment management has gained acceptance and achieved enormous growth in recent years")
- NYTimes : Number Crunchers Throw Asia Into a Tizzy: 8/99 (chaos when Morgan rebalances the index)
- NYTimes: The Index Monster in your Closet 10/99 ( "closet indexing" in portfolio management)
FT: Mastering Investment: Indexing (a detailed description on index construction -- for those who want to delve deeper into it)
Class 10
The Use of Funds as an Investment Strategy
Required:
.FT:
International Exchange Traded Funds (ETF) 7/5/02
ETF's - A Primer
Optional:
- FT: Sectors gain as Country Funds Lose Appeal (ramifications of the Euro)
- NYTimes: Investing: Untangling Emerging Markets 1/99
- FT: Mutual funds: Poor Returns that Disguise a Bonus for Investors 6/18/01 (mutual funds offer returns that are lower than indexed funds... yet they remain very populer... why?)
- FT: Home Economics Rule Overseas Funds 6/27/01 ("investor irrationality.. foreign fund investors attitudes.. are driven not by the foreign market but by the U.S. market..")
- FT: Picking up on a stock basket's popularity: ETFs continue to grow 8/28/02
Are "socially responsible" funds gaining acceptance?
Class 11
Thailand -- A Convergence Trade
Required:
Class 12
Emerging Market Derivatives
Optional:
- LatinFinance: Lingua France: How to Speak like a Derivatives Native
- Sassoon: Investment in HSI Options: (what options are and how they work -- a very good primer)
FT: Derivatives: The Use and Abuse of Derivatives: 5/14/01
Class 14
Emerging Market Currencies
More details and a more technical analysis to currencies
Optional:
- Goldman Sachs: The Global Flow of Funds: Chapter 2 (a look at Balance of Payments)
- Goldman Sachs: Currency Options and Volatility Ch 11
- The E.M. Group: Assessing E.M. Currency Risk (economic models and risk indicators)
JP Morgan: Introduction to hedging EM currency risk
FT: A Hard Currency - what are the benefits?
Class 15
The Crisis in S.E. Asia and Latin America
Required:
3 parts of a terrific NY Times Series:
Class 16
Emerging Market Debt and the Brady Bonds
Required:
The Brady Bond Market
- JP Morgan Tutorial: Session 1: Introduction to Stripped Yield (Overview)
- JP Morgan: Introduction to the JP Morgan EMBI (Emerging Market Bond Index (it is the equivalent in bonds to EAFE in stocks)
- JP Morgan: Introducing the Emerging Market Bond Index Plus
Optional:
- JP Morgan Tutorial: Session 2: Duration
- JP Morgan Turorial: Session 3: The Rolling Interest Guarantee
Optional: Bonds in General
- FT: Principles of Bond Portfolio Management (discusses the differences between bonds and equities ..and shows how investors select)
Salomon: Understanding Duration and Volatility ( a 1985 paper with an in depth discussion )
Class 17
Local Bonds, Swaps, Relative Value and the Repo
Required:
- Morgan Stanley: Emerging Market Repo
Optional:
Class 19
What is Default and Can You Protect Against It
Required:
Optional:
- FT: Mastering Risk: Lenders and Borrowers demand a creditable system 5/00
- WSJ: Capital: A Default in Slow Motion 11/01
- I.M.F.: On the Need for an International Lender of the Last Resort 1/99
- Latin Finance: Vaulting the Sovereign Ceiling (should corporations be rated higher than the sovereign?)
- Warburg: Asian Bonds: Debt by Name, Equity by Nature (in credit crunches debt can behave like equity)
Optional -- Technical Analysis
- Merrill: Credit Default Swaps
CSFB: Implied Default Probabilities: A New Approach to Risky Debt
Class 20
An Emerging Market: Viet Nam
Required:
Freund: The Equitization Process in Viet Nam (a report written by an MBA student in 1994 -- resulting in his getting a job managing money in Viet Nam)
Optional:
FT: Vietnam's change of Heart: 8/27/02
Class 22
The Hedge Fund
Required:
- NYTimes: Lewis: How the Eggheads Cracked
- Inst. Investor: J Meriwether by the Numbers
- When Genius Failed
Optional: