Slovakia and Chile Top Index for Investment Attractiveness
Midland companies should keep an eye on emerging markets such as China, Slovakia and Chile and be ready to invest once the global economy improves, according to experts at PricewaterhouseCoopers.
The business advice firm says that although many emerging market countries are experiencing sharp slowdowns in economic activity due to the global financial crisis, not all of them have been equally affected.
That means that UK companies need to reappraise the relative risks of investing in those markets.
The annual PwC EM 20 Index ranks the top 20 emerging market countries by investment attractiveness in both the manufacturing and services sectors.
In the manufacturing sector, Chile has topped the table in terms of its attractiveness to potential investors, replacing Egypt, which held the top spot last year.
In the services sector, Slovakia has topped the table in terms of its attractiveness to potential investors, replacing Poland, which has moved down to third.
Countries ranked higher in the Index tend to have a lower risk premium compared with others, at a time when upward revisions of risk are common.
The risk/reward economic model used to calculate the Index has been revised to take into account other elements of risk beyond the sovereign debt data primarily used in the past.
The Index now places greater weight on the fundamentals behind country risk such as political stability, regulatory effectiveness and the rule of law. …