Country Risk: A Mid-year 2019 Update | Value Investing News

Country Risk: A Mid-year 2019 Update

  • The Sources of Country Risk When companies invest outside their domestic markets, the most immediate risk that they are exposed to is exchange rate risk, since revenues, profits and cash flows are affected by changing exchange rates.
  • Political Risk: If the last few years have taught us a lesson, it is that politics can affect economic and market risk, not just in emerging markets, but also in developed ones.
  • There are country risk measures in markets, albeit focused primarily on default risk, and the most public of these are sovereign ratings, there are now also market based measures, sovereign CDS spreads.
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