Groundhog Day In Greece, Hijinks In Brazil And Market Chaos In China: Pictures ... - ValueWalk
On the other side of the world, the Chinese government, which finds markets useful only when they serve its purposes, is trying to stop a full fledged rout of its equity markets. The first is that globalization, while bringing significant benefits, has created connections across markets that make any country's problem a global one. The second is that notwithstanding this globalization, some parts of the world are more prone to generate political and economic surprises than others. As companies and investors are forced to look outside their borders, I thought it would be a good time to examine how and why risk varies across countries and at updated measures of that risk. The Sources of Country Risk There is risk in every market for investors and businesses, but some countries are more exposed to risk than others. While there are few people who would contest this notion, I think it is still worth examining the drivers of country risk as a prelude to measuring it. Broadly speaking, these drivers can be broken down into political, legal and economic groupings. Stage in Development Life Cycle : When looking at companies, it is generally true that companies early in their life cycles, with evolving markets and business models, will be more volatile and risky than companies that are further alone in the... Source: www.valuewalk.com
