World Of Business

By ROBERT BALL

Most investors know that 1991 was a good year on Wall Street. Not so many know that, compared with a lot of other equity markets, Wall Street was an also-ran. Despite the headlines about New York's all-time record highs in January, the same is proving to be true so far this year.

This simply underlines how many games there now are in town. New York, London and Tokyo may be the heavyweights, but there is action in Thailand, Jordan and Chile as well. Datastream International, a company that provides market data, tracks 40 stock markets worldwide. Brokerage houses now need the horizons of travel agents to satisfy a clientele no longer content to stay at home. Much treasure lies buried on distant shores, in places that used to show up only in holiday brochures or travelogues.

According to a study by Morgan Stanley Capital International, the 1991 world champions came from Latin America. The markets in Argentina, Mexico and Chile were up 403%, 120% and 106%, respectively, after converting local currency gains into dollars. (Brazil, an even higher flyer, lost out on conversion: the cruzeiro sank about as fast as the market rose.) But it wasn't just a Latin carnival. The Philippine stock market trebled Wall Street's 26% gain, Hong Kong nearly doubled it, and Australia matched it.

Exotic equity markets, called fringe markets or emerging markets in the securities trade, are continuing their surge in 1992. Five weeks into the year, all the top 15 in Datastream's rankings are Third World countries, except Taiwan, South Korea, Greece, Hong Kong and Finland, and these 15 leading performers include such surprises as Colombia, India, Indonesia and Nigeria. The U.S. languishes in 21st place, among such other slugabeds as the major European countries. Japan, of course, is famously down, bumping the bottom of the performance standings.

This doesn't mean that investors should rush to put their nest eggs into Zimbabwean stocks. The risk to a hard-currency investor of losing on conversion what has been won in local currency is only one of the hazards. All markets fluctuate, but small exotic markets, often thin and subject to political instability, are apt to fluctuate more. Nonetheless, sophisticated investors and their brokers cannot ignore the opportunities provided by the extraordinary diversity of market performance. Nowadays there is always money to be made somewhere in the world.

To be sure, many of these stock markets have been around for some time, but until recently obstacles to investing in them were too daunting for most players. Now investors nearly everywhere can choose from a smorgasbord of national and regional equity funds run by people who can claim to know what they are doing. Martin H. Paling, chief investment strategist for London stockbrokers James Capel, says, "Equity investors are clearly becoming more adventurous. For example, the large rises in markets in Latin America reflect more than domestic interest."

Picking individual stocks in faraway places is not for the fainthearted, but with exotic stocks packaged in funds, an investor undeterred by transaction costs can even daydream of multiplying his gains by surfing around the world, taking a short, profitable ride on each cresting wave. All he needs is a globe, a pin and some strong hunches. In the '90s even distant neighbors have no trouble keeping up with the Dow Joneses.