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Opportunities in Emerging Markets. Investing in the Economies of Tomorrow. Wiley Finance

  • Book

  • 448 Pages
  • January 2013
  • John Wiley and Sons Ltd
  • ID: 2216152

Praise for Opportunities in Emerging Markets

"With the attention of asset allocators now shifting from under–performing public bond and stock markets in the OECD economies to the emerging or growth markets, particularly in Asia, it is timely to have a book written by practitioners in these markets, which examines them in detail. Too often, the emerging markets have been bracketed together under various acronyms BRIC, etc. which hide wide differences and mask the potential and dangers that exist. It is essential to see these markets in detail and with enough solid evidence (and war stories) so future investors can grasp the opportunities that abound. This volume casts a spotlight on a number of emerging and so–called frontier economies that gives investors the beginning of a toolkit for detailed analysis and assessment."
Robert Binyon, Chairman of Aureos Capital

"Gordian Gaeta has put together an impressive range of contributions on how to invest in emerging markets. As the book′s thesis indicates, investing in emerging markets can be quite different from that of developed markets. But there are also patterns that one can recognize, and the authors of the book have done a good job in describing what the patterns are. I was especially attracted by the section on China authored by Malcolm Riddell who′s been working on Greater China business issues for many years. Riddell′s views and recommendations are insightful and helpful to the reader."
Edward Tse, Senior Partner and Chairman, Greater China, Booz & Company

"Opportunities in Emerging Markets is an excellent contribution to the understanding of the economic potential of developing countries and the great long–term investment opportunities they offer."
Marc Faber, "Doctor Gloom" ([external URL] and Director of Marc Faber Limited

Table of Contents

Preface xi

Selected List of Acronyms xvii

PART ONE On the Selection and Classification of Developing Markets 1

CHAPTER 1 On Developing Markets in General 7

The Notion of Developing Markets 7

The Nature and Structure of Emerging Markets 9

The Spectacular Rise of Developing Markets 12

Practical Perspective on Frontier Economies 16

Conclusion 22

CHAPTER 2 Developing Market Classifications and Categorizations 25

Investable Emerging Market Classifications 25

Frontier Market Categorizations 44

Conclusion 50

CHAPTER 3 Considerations on Emerging and Frontier Market Classifications 53

Consequences of Classifications 54

Issues with Classifications 64

A Potential Leap in Classifications 71

Indexing and Passive Investment: The Asian Investor Perspective 73

Conclusion 82

CHAPTER 4 Alternatives on Selecting Investable Developing Economies 85

Investor Factors of Importance 87

Essential Economic Freedoms 89

Global Competitiveness 94

Doing Business 96

Governance Indicators 97

Financial Centers Ranking 100

Global Manufacturing Competitiveness 101

Stock Market Aspects 103

Conclusion 105

CHAPTER 5 Private Equity Flows as a Lead Indicator 107

Private Equity Flows: The Next Wave of Investable Markets 107

Private Equity as Lead Indicator 114

Emerging Markets Private Equity in Practice 122

Conclusion 130

CHAPTER 6 A Different Selection of Investable Markets 133

PART TWO The Investment Case for Developing Markets 141

CHAPTER 7 Emerging Markets Investments Short Term or Secular Theme 145

The Confounded State of Industrial Nations 146

Change in Global Power Balance 163

Emerging Markets on the Growth Path 166

Global Redistribution Has Only Started 172

Conclusion 175

CHAPTER 8 A Case for Frontier Markets 177

New, Yet Familiar Territory 179

Key Drivers of the Frontier Markets Opportunity Set 181

Risks to Investing in Frontier Markets 195

Conclusion 199

CHAPTER 9 Subcontinents: Sub–Saharan Africa and Southeast Asia 201

The Investment Case for Africa 201

South and Southeast Asia Frontiers: Opportunities Abundant 212

Conclusion 229

CHAPTER 10 Regions: Middle East, GCC, Levant, and North Africa 231

The Soft Side of Business in MENA 232

Investor Markets in MENA, GCC, North Africa, and Levant 236

The Case of Oman: Solid Foundations for Investment 244

Oman Stock Market 248

United Arab Emirates: Plentiful Business and Capital 250

Conclusion 252

PART THREE Pragmatic Investing in Developing and Unclassified Markets 255

CHAPTER 11 Investments in China 259

Seeing the Whole China Elephant 259

China Investing, Chinese–Style 262

The Whole Elephant: How to Evaluate a China Investment 274

Conclusion 277

CHAPTER 12 The Genesis of Markets: Colombia, Mongolia, and Haiti 279

Colombia: From Drugs to Investment Destination 279

Mongolia: Opportunities in the New Frontier 288

Haiti: Out of Tragedy to Future Frontier Market? 297

Conclusion 305

CHAPTER 13 Nascent Stock Markets: Myanmar, Laos, and Cambodia 309

Myanmar: Change toward Long–Term Attraction? 309

Lao People s Democratic Republic: Emerging from Isolation 316

Kingdom of Cambodia: A New Market 326

Conclusion 331

CHAPTER 14 Credit and Real Estate Markets in Emerging Economies 335

Credit Markets of Emerging Central and Eastern Europe 335

Real Estate Market in the Mekong Region 344

Conclusion 350

CHAPTER 15 Critical Business Issues in Developing Markets 353

The Importance of Being Earnest: The UK Bribery Act Globally 353

Information Technology in Developing Markets 366

Conclusion 374

CHAPTER 16 Operating in Emerging Markets 377

The Substance of Marketing in Developing Markets 377

Corruption Utile 383

Business Styles and Requirements 385

Conclusion 389

About the Author and Editor 391

About the Contributors 393

Bibliography 405

Index 413


Dr. GORDIAN GAETA is an active private equity investor and advisor specializing in complex and distressed equity and alternative investments and transactions predominantly in the developing economies of Asia. He participates on boards, investment and finance committees, and in executive functions of fund managers, investment firms, and financial services companies. Gaeta started his career as a banker in several countries before becoming a management consultant. A former academic, he also lectured at several universities; served as director, professor, or dean of private academies certifying financial services professionals on investment; and co–chaired the Asian Banker Summit. Gaeta contributes regularly to an investment column as well as investment publications and is the author, coauthor, or editor of various books related to finance, business, and investing, including Frontiers in Credit Risk (Wiley).