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The article reports on the decline in the power of the American capital market. No longer competitive in providing capital for corporate development and growth and having ceded power to financial centers in Europe and Asia, the United States has launched a series of initiatives and study groups to examine ways of reclaiming its capital market prominence.

Asia boosters at the international investment houses have called the stockmarket wrong before. They understand Asia's challenges. Yet they point out that over the past three years Asian equities (as measured by the MSCI Asia Free ex-Japan index) have fallen by nearly half, even as returns on equity have risen and corporate indebtedness has fallen. Timothy Moe, Asian equity strategist at Goldman Sachs, sets his case for a sustained period of outperformance on three pillars. Moreover, because of Asian economies' and stockmarkets' sensitivity to the global economic cycle, any world recovery in 2003-04 would be magnified in the performance of Asian shares -- but then so would any slump.

The article details the rise in Asia of obscure private markets in which institutional investors finance private deals for firms too small for initial public offerings (IPOs). Most such investments are through off-market convertible debt instruments paying interest and with an equity kicker. These investments do not give managerial control, their terms are set by private contract, they typically mature within three years, and there is almost no public information on them.

The biotechnology industry in 2004 appears at last to have settled into stable good health--in the United States, at least. According to reports on the biotechnology industry, United States' 1,473 biotechnology firms attracted $14.4 billion of new investment the previous year, two-thirds more than in 2002. The U.S. biotechnology industry may be attracting more money because it is making more. These firms have now produced several billion-dollar blockbuster drugs, and show every sign of delivering more: in 2003, 25 new biotechnology drugs were approved by the U.S. Food and Drug Administration. Though immature compared with the U.S., Asia's biotechnology industry is already starting to rival it in certain niches, such as drug screening and biotechnology-drug manufacturing.

Looks at Asian lending and changes in the role of Japan in lending to Asian companies. The prior domination of Japan in the lending market; The decrease in Japanese bank loans to Asia in the first half of 1999; Early signs of a Japanese return in this area; Chart showing Japanese bank lending to Asia from December 1997 to June 1999.

Presents information on Asia's bond markets. Discussion on how the bonds end up with non-Asian investors; Focus on the idea floated by the Asian Development Bank to create an AsiaClear system; Description of how this system would bring trading in these bonds back to Asia; Views of Joseph Yam, chief executive of the Hong Kong Monetary Authority; Discussion on the local-currency bond markets.