With the prolonged period of healthy global growth, strong capital inflows, substantial increases in foreign exchange reserves and improving terms of trade, emerging markets have witnessed robust expansion with limited inflationary pressures. Emerging markets have exploited the opportunity to expand their share of the global economy and become less dependent on the US.
Nevertheless the bouts of volatility indicate the vulnerabilities and risks to which these countries are exposed. 5. Domestic financial market developments  On the domestic front, the equity market has exhibited phenomenal performance over the past few years, with the South African All-share Index (Alsi) increasing from around 10 500 at the start of 2002 to over 28 000 in April 2007.