Capital Markets: Global Aspirations, Regional Values and Local Fears

The classical definition of a capital market is ‘a place where companies can look for long-term investment capital’.1 However, the behaviour of capital markets across the globe responds to the investment populations that they serve and the companies for whom they are building markets. To say that all capital markets are merely mechanisms for businesses to acquire various forms of financing, or to say that an investor in one market is like all other investors — simply looking to achieve the greatest possible returns — is to underestimate the diversity of the markets themselves. European markets behave differently from Asian, African, Australian, North and South American markets. The allure of globalization tends to homogenize these into a global pool of capital that marches in lock step with the rises and falls in the United States markets, although events such as the 11 September 2001 tragedy cause a ripple effect throughout capital markets worldwide, a longer term examination of the markets reveals that each market has its own market vitality, unique style of investor and types of company interaction that defines the market personality or tenor. This tenor is not to be overlooked in developing local, regional and global value propositions, because it is a critical element in developing the niche market opportunities and subsequent localized value propositions.