EMERGI NG Markets are those having low to middle per capita Representing 80% Global Population and 20% World's Economies Term Of EMEs was coined in 1981 by Antoine W. Van Agtmael Development and Reforms (E.g: china and tunisia) LOCAL POLI TI CS VS GLOBAL ECONOMHY Weight the Local political and Social factors Local Investors Opposition National Pride Opening EME Market for Global Ethics, Standards
EMERGI NG Markets are those having low to middle per capita Representing 80% Global Population and 20% World's Economies Term Of EMEs was coined in 1981 by Antoine W. Van Agtmael Development and Reforms (E.g: china and tunisia) LOCAL POLI TI CS VS GLOBAL ECONOMHY Weight the Local political and Social factors Local Investors Opposition National Pride Opening EME Market for Global Ethics, Standards
EMERGI NG Markets are those having low to middle per capita Representing 80% Global Population and 20% World's Economies Term Of EMEs was coined in 1981 by Antoine W. Van Agtmael Development and Reforms (E.g: china and tunisia) LOCAL POLI TI CS VS GLOBAL ECONOMHY Weight the Local political and Social factors Local Investors Opposition National Pride Opening EME Market for Global Ethics, Standards
ABSTRACT Q: How A Countrys Market Will be Considered As Emerging Market? Q: Why MNCs wants to do Business in Emerging Markets? Main Objectives of this Report are: To Highlight the Opportunities for MNCs to Enter in the EM To Highlight the Risks for MNCs to enter in EM
WHAT I S EMERGI NG MARKET?
EMEs are those having low to middle per capita Representing 80% Global Population and 20% Worlds Economies Term Of EMEs was coined in 1981 by Antoine W. Van Agtmael Development and Reforms (E.g: China and Tunisia)
HOW AN EME LOOKS LI KE? Transitional Economy (Eg: Former Soviet Union and Eastern block countries) Transparency and Efficiency in the capital market Exchange Rate Reforms Increased Local And Foreign Investment Increase Domestic Product and Production level
PORTFOLI O AND I NVESTMENT RI SK
Opportunity of Investment for high Risk Takers Reverse trend of Portfolio cash flows Due to High Systematic Risk Asian Crises 1997 LOCAL POLI TI CS VS GLOBAL ECONOMHY Weight the Local political and Social factors Local Investors Opposition National Pride Opening EME Market for Global Ethics , Standards and Culture I DENTI FY EME OPPORTUNI TI ES Five Context Framework: Identify how your product, labor and capital will work or not work in this market Home Market and Developing Market Social and Political Factors Must be Consider
POLI TI CAL AND SOCI AL SYSTEM No Concept of Independent trade unions in Socialist Economy Transfer of Assets in South Africa to Historically Disenfranchised Native Africans Relationship between Ethnic , religion and Linguistic Groups also effects on foreign investors(Eg: Chinese and Malay Community) Executives Should identify the Countrys power centres and decentralization of political system OPENNESS Welcome Direct Investment MNCs Joint Ventures and licensing For Countries that do,t allow FDI (Eg.: China is considered as open economy for Foreign Investors but India is Relatively Closed as India has made open travelling of foreigners for getting idea from west) Easy for functioning of Intermediaries
OPENNESS CAN BE DOUBLE EDGE SWORD Openness for Foreign Investors Trade unions are not allowed to operate freely by the government(Example of Chile) Financial Intermediaries become more sophisticated Logistic will grow rapidly