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
Authors
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).
