Forward-thinking investors are constantly looking for the next BRIC-what foreign market is on the brink of expansive growth? Will these investments payoff, or are the potential risks too great? Investing in these emerging markets requires a careful analysis of potential risks and benefits which vary greatly from country to country and even from day to day.
In Cracking the Emerging Markets Enigma, emerging markets expert Andrew Karolyi outlines a practical strategy for evaluating the opportunities and-more importantly-the risks of investing in emerging markets. Karolyi’s proposed system evaluates multiple dimensions of the potential risks faced by prospective investors. These categories of risk reflect the uneven quality or fragility of the various institutions designed to assure integrity in capital markets-political stability, corporate opacity, limits placed on foreign investors, and more. By distilling these analyses into a numerical scoring system, Karolyi has devised a way to assess with ease emerging markets by different dimensions of risk and across all dimensions together.
This novel assessment framework already has been tested in the market to great success. Researchers, students, firms, and both seasoned and novice investors are poised to gain a clear understanding of how to evaluate potential investments in emerging markets to maximize profits.
Table of Contents
PART I UNDERSTANDING THE RISKS IN EMERGING MARKETS
Chapter 1 Accepting the Challenge
Chapter 2 The Emerging Market Landscape
Chapter 3 A Primer on Empirical Methodology
PART II BUILDING THE EMERGING MARKETS RISK INDICATORS
Chapter 4 Market Capacity Constraints
Chapter 5 Operational Inefficiencies
Chapter 6 Foreign Accessibility Restrictions
Chapter 7 Corporate Opacity
Chapter 8 Limits to Legal Protections
Chapter 9 Political Instability
PART III VALIDATING THE RISK INDICATORS
Chapter 10 Do the Emerging Market Risk Indicators Work?
Chapter 11 Making Sense of the Emerging Market Swoon of 2013
PART IV THE EMERGING MARKETS ENIGMA CRACKED?
Chapter 12 Final Remarks and a Few Cautions