While many commercial and investment banks have been cutting their activities in emerging markets, Chase Manhattan Corp. has expanded its capital market business in those countries.

That is why Joyce Chang, a 34-year-old emerging-market specialist, recently left Merrill Lynch & Co. to join Chase. At Chase she heads the emerging-market fixed-income research unit.

U.S. commercial and investment banks adopted a variety of strategies when they decided to enter the emerging-market business some years ago, but "only a handful have shown any staying power," Ms. Chang said in an interview last week. "That means fewer key players are left."

That's good news for those with the staying power. Ms. Chang, of course, predicts that Chase is among them. Others, she says, include J.P. Morgan, Citigroup, Morgan Stanley Dean Witter, and Goldman, Sachs & Co.

The losers, Ms. Chang says, include Merrill, the former Bankers Trust Corp. (now part of Deutsche Bank), Bank of America Corp., and BankBoston Corp.

Unlike banks that depended on acquisitions of investment banks for a toehold in merchant banking, Chase has been building a capital markets group from scratch, using emerging markets as a springboard.

Lawrence Cohn, a banking analyst with Ryan, Beck & Co., said, "Chase has a tremendous advantage over investment banks, because it has had a long- standing presence in those markets and because of its lending capabilities."

Ms. Chang said the short-term approaches to emerging markets taken by some U.S. financial institutions do not work. The pullbacks were prompted by severe devaluations and deep recessions in many emerging-market countries, which caused heavy losses for banks that operated in those markets.

Conditions have improved somewhat, but Ms. Chang said a full recovery is unlikely soon.

Though emerging-market borrowers have been returning to the international capital markets faster than anyone expected, the market is "still a little directionless," Ms. Chang said.

"The banks which managed the recent market volatility well were those that held on to their experienced senior management," the economist said. "The ones that didn't focus on emerging markets as a business in itself-and turned it into an extension of their U.S. high-yield businesses-didn't."

Born in Peoria, Ill., and raised in Knoxville, Iowa, Ms. Chang speaks at the speed of a New Yorker. She succeeds Lawrence Brainard, a veteran emerging-market economist.

Ms. Chang spent three and a half years at Merrill, analyzing sovereign bond issues and coordinating recommendations for asset allocation within Latin America and other developing regions.

Before that she worked six years at Salomon Brothers.

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