Conducting Capital Markets Assessments in Developing Countries.

Tool | January 31, 2009

The objective of the Capital Markets Assessment Tools (AT) is to conduct capital markets diagnoses in developing countries, based on a comprehensive questionnaire, and to identify targeted technical assistance to develop and strengthen well-functioning public markets.

The United States Agency for International Development Bureau for Economic Growth, Agriculture, and Trade (EGAT) developed the Capital Markets Assessment Tool (AT), which was derived from the Capital Markets Questionnaire for Equity and Corporate Debt Securities developed by Robert Strahota with support from USAID EGAT. The objective of the AT is to support assessment of a jurisdiction’s markets for equity and corporate debt securities, with the intention of providing targeted technical assistance to develop well-functioning public markets. As used in this AT, an organized public market is a well regulated market for equity or corporate debt securities that is open to retail and institutional investors and that is capable of performing effectively the functions normally associated with capital markets, including channeling savings into investments and offering reliable price discovery and liquidity. An organized public market provides companies with a cost-effective means of capital formation as an alternative to bank borrowing. It may be a securities exchange, automated trading system, or over-the-counter market.