FYI:
biz.yahoo.com
Wednesday July 15, 11:54 am Eastern Time
Company Press Release
Poland, Argentina and Mexico Projected to Have Lowest Investment
Risk of Ten Largest Emerging Markets
World's Largest Economic Forecasting Firm Releases 1998 Global Risk Review
LEXINGTON, Mass.--(BUSINESS WIRE)--July 15, 1998-- Among the ten largest emerging markets in the world Poland, Argentina and Mexico are projected to be the lowest investment risks over the next five years, according to the 1998 Country Risk Review released today by Standard and Poor's DRI, the world's leading provider of economic forecasting, consulting and information services.
Examining and analyzing more than 50 variables including governmental policies, economic trends, domestic political and economic risk factors, Standard and Poor's DRI ranked the investment risk levels of the world's ten largest emerging markets from lowest to highest, with investment risk in Poland ranking the lowest and Indonesia the highest. Comparative lists of the markets considered to be the five lowest investment risks and the five highest for 1998 and 1997 follow:
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Ranking of Lowest Investment Ranking of Highest Investment
Risk of Ten Largest Risk of Ten Largest
Emerging Markets Emerging Markets
1998 1997 1998 1997
1. Poland Argentina 1. Indonesia S. Africa
2. Argentina Poland 2. S. Africa China
3. Mexico Mexico 3. China Indonesia
4. Turkey Turkey 4. India Russia
5. Russia India 5. Brazil Brazil
''This year's ranking has seen a shuffling of last year's major players. A continued upswing in industrial output together with declining inflation, fueled by a recent cut in interest rates, has strengthened Poland's economic outlook and raised its ranking to the least risky top ten emerging market for business investment today,'' said Nariman Behravesh, chief international economist for Standard and Poor's DRI. ''Though we believe that in the near term Poland will pose the lowest business investment risk of the ten largest emerging markets, a strongly appreciating currency may lead to problems over the longer term.''
Of the ten emerging markets analyzed by Standard and Poor's DRI, Indonesia ranked the riskiest, amid concerns about the ongoing instability of the country's political and economic infrastructure. ''Indonesia is suffering from the devastating effects of years of fiscal mismanagement under the recently ousted President Suharto,'' said Behravesh. ''Social unrest,unemployment and the departure of many of the country's ethnic Chinese workers have resulted in a virtual collapse of the economy.'' Last year, the country was ranked as the world's third highest emerging market investment risk.
The outlook for China, which this year ranks third highest among the top ten emerging markets in terms of risk, remains problematic largely because of a likely devaluation of the renminbi next year, a continued decline in the growth of exports because of falling demand in Asia overall and persistent domestic deflation.
According to the Standard and Poor's DRI 1998 Country Risk Review, falling GDP and a declining growth in exports are further worsening prospects for Asia's economies, which dominate the list of countries with the highest investment risk this year. ''There seems to be little light at the end of the tunnel for the region,'' said Behravesh. ''A wave of destabilizing factors including Japan's worsening recession and political paralysis, ongoing political squabbles between India and
Pakistan and China's likely currency devaluation, continue to plague the region which now relies on intra-regional trade for 40 percent of its exports.''
The Standard and Poor's DRI report also examines the effect of the Asian crisis on world commodity prices, which according to the International Monetary Fund's All Non-Fuels Commodity Index have experienced a decline of 11 percent since July 1997. ''Commodities such as nickel, aluminum, copper and coffee are still at their lowest price levels since the crisis began, the result of increasing competition in the face of shrinking markets,'' said Behravesh. ''Demand from the world's largest buyer of nickel, Japan, is projected to drop by up to 15 percent this year alone.''
Every quarter, Standard and Poor's DRI publishes an analysis of global business risk using over 50 economic, political and fiscal variables, ranking the 106 nations of the world in each of these categories. For more information about this service, call 1/800-933-3374.
Standard & Poor's DRI is headquartered in Lexington, Mass., and maintains offices in New York, San Francisco, Chicago, Atlanta and Washington, D.C., and outside the U.S. in Canada, Belgium, France, Germany, Italy, United Kingdom and Hong Kong.
The company also maintains strategic partnerships with firms throughout Asia and Latin America. Standard & Poor's DRI is a unit of Standard & Poor's Financial Information Services Group, which provides integrated insight and customized information to corporations and global financial markets.
These rankings are based on detailed analysis undertaken by Standard and Poor's DRI and do not necessarily represent the views of other Standard & Poor's companies
Contact:
The Hubbell Group
Constance Hubbell, 781-878-8882
I hope this helps.
Greg
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