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Analyzing Country Risk -Political Risks
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Contents
The importance of Analyzing Country Risk
Political Risk
Political Stability
Economic Factors
Subjective Factors
Capital Flight
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The importance of Analyzing Country Risk
Interaction of politics and economics
International economic environment =`heavily dependent on the individual policies
Understanding the close linkage between a country¡¯s economic policies and the degree of exchange risk, inflation r...
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_SLIDE_1_
Analyzing Country Risk -Political Risks
_SLIDE_2_
Contents
The importance of Analyzing Country Risk
Political Risk
Political Stability
Economic Factors
Subjective Factors
Capital Flight
_SLIDE_3_
The importance of Analyzing Country Risk
Interaction of politics and economics
International economic environment =`heavily dependent on the individual policies
Understanding the close linkage between a country¡¯s economic policies and the degree of exchange risk, inflation risk, and interest rate risk is vital
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What are the Political risks
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What kind of aspects can we approach
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Political Stability
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Country risk
Transfer and convertibility risk
(i.e. the risk a government imposes capital or exchange controls that prevent an entity from converting local currency into foreign currency and/or transferring funds to creditors located outside the country)
Cases of force majeure
(e.g. war, expropriation, revolution, ci¡¦(»ý·«)
not lose the direction of)
Meet the feasibility
Relationship with other strategies considered
(Sources and uses cash flow balance, flexibility, take advantage of synergies
in stock)
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Capital Flight
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Thank you !
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These are occurred by government¡¯s intervention. That¡¯s why it¡¯s called as a ¡®political risks¡¯
However, it¡¯s not just about bad effect, means good effect as well.
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There are two basic approaches of political risk.
One is countries-specific and another is Firm-specific. Countries-specific approach is more macro aspect than firm-specific approach.
So, we¡¯d better focus on Countries-specific approach for political stability.
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We can calculate political stability from these things.
Political stability is quire important because most companies believe that greater political stability means a safer investment
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