New horizons

Article Abstract:

Investing inemerging markets is risky and many investors made losses in 1994. Short term prospects foremerging markets are not good in 1995, but investors should aim to diversify and includeinvestments from regions other than the developed world. Countries which are exposed to the USand are likely to be hit by rises in US interest rates are more risky. Countries with low exposureand high savings ratios offer better prospects. Chile, Taiwan and India are relatively attractive, asis South Africa, though there are risks in this region.

Securities

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Emerging markets: settling down

Article Abstract:

Emerging markets have been affected by the Mexican financial crisis which it both Latin America and Asia. Over a ten year period, Latin American emerging markets have performed better than those in Asia, with the best returns coming from Mexico, Chile, Brazil and Argentina. Hong Kong has also performed well, and benefits from proximity to Guangdong province. Trade protectionism and a rise in interest rates world wide could affect emerging markets. Asia is less volatile than Latin America, so involves less risk for investors.

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Inflow, outflow

Article Abstract:

The devaluation of the Mexican peso is likely to have an impact both on investors' confidence with regard to Mexico, and toward Latin America as a whole. The Mexican crisis was caused by its unsustainable balance of payments deficit, with capital inflows helping to fund both consumption and speculation. Political instability also fueled the crisis, and austerity measures taken to remedy the crisis could lead to more political problems. Flows to Mexico are likely to be affected, as are flows to the rest of Latin America.

Mexico, Capital market, Capital markets

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