Professional Documents
Culture Documents
Value vs growth ?
Short vs Long term?
Buy or Sell ?
Timing of buying/selling?
Why a crisis may be a best time to buy?
A
Economic openness: trade, investment, capital flows
Attempts to put numbers to these considerations: the
higher the better
See Fig. 41, GG, p. 90 (scale from 0 to 100)
and Karolyi, Fig. 6.1, p. 104 (scale -1.5 to 1.0)
Ranking:
North America
Europe
Asia Pacific &South/Central America; Middle east/North
Africa roughly the same
Sub-Saharan Africa
Economic Freedom 2012 from 0 to 100 (best). Gaeta page 90
China (29)
Thailand (37)
Indonesia (38)
The Philippines (59)
India (60)
Vietnam (70)
Laos (81)
Cambodia (88)
Myanmar (139)
Variables used in constructing global
competitiveness
Based on 12 pillars of competitiveness
Institutions, Infrastructure, macroeconomic development,
health and primary education, higher education and
training, goods market efficiency, labour market
efficiency, financial market development, technological
readiness, market size, business sophistication,
innovation (R&D, intellectual property)
Governance Indicators (World Bank): aggregation of
See attached Excel file
6 dimensions of governance
Voice and accountability
Political stability and absence of violence/terrorism
Government effectiveness
Regulatory quality
Rule of law
Control of corruption
http://info.worldbank.org/governance/wgi/index.aspx#home
Note a positive relationship between higher governance
levels and growth (size) of the stock market.
Also refer to Karolyi Chapter 7 on corporate opacity.
Global Manufacturing Competitiveness
(The Global Manufacturing Competitiveness, US Council
on Competitiveness)
Ranking
China (1), India (2), Korea (3), US (4), Germany (8),
Singapore (9), Thailand (12), Australia (15),
Note: demise of Australian automotive industry and
manufacturing industry (?)
Investing in Asia Pacific markets: Is it a
fundamental/long-term investment or a temporary
shift?
Developed economies are in slow recovery:
Key issues in developed economies: public debt rising and
slow growth
Since the final crisis developed economies depend more
and more on emerging markets to emerge from the
present stagnation. On the other hand Asia Pacific
economies are improving fast in many fronts.
Answer: yes its a fundamental shift and a long term
prospect for investments in Asia Pacific markets.
Chinas current market conditions
Issues:
Devaluation: assessment?
Growth targets: 7% achievable?
Structural adjustment: more services less manufacturing?
Anti corruption drive?
Impacts on Australia: FTA?
Other issues?
I.4 Consider frontier markets, GG Chapter 8