risks in frontier markets

13
Risks of Operating in Frontier Markets

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Post on 07-Dec-2014

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Leadership Traits Required to Succeed in Frontier Markets: Learn 6 unique traits required by leaders in Frontier Markets to succeed in creating exceptional organizations. How to Succeed as an Expat in Frontier Markets Use these 10 techniques to thrive as an expat in Frontier Markets and become one of the success stories in the region.

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Page 1: Risks in frontier markets

Risks of Operating in Frontier Markets

Page 2: Risks in frontier markets

Frontier markets provide incredible opportunities with

significant operational and financial risks.

Page 3: Risks in frontier markets

Lack of Governance

Inadequate and Emerging Infrastructure

Living in Fear

Resource Availability and Capability

Operational Risks in Frontier

Markets

Page 4: Risks in frontier markets

Frontier market governance systems don’t have the opportunity to settle down causing:

Lack of consistency

Unpredictability

Questionable protection to citizens

This leaves government, legal andregulatory issues open for personalinterpretation and application.

Lack of Governance

Page 5: Risks in frontier markets

Inadequate and Emerging

InfrastructureIn fast growing countries, the investment in infrastructure can often fall behind.

This can lead to significant shortages in:

Energy

Transport

Financial services

Education Infrastructure

Page 6: Risks in frontier markets

Only the privileged few receive education in well regarded universities.

This creates a significant gap causing talent to leave the country or not be polished.

Combined with a lack of exposure to developed management systems, companies end up scrambling for resources.

Resource Availability and Capability

Page 7: Risks in frontier markets

People from the developed world take basic level of security as granted.

In many frontier markets this is not the case. Living in a state of fear has an impact on the psyche and wellbeing of its citizens.

Living in Fear

Page 8: Risks in frontier markets

Geopolitical and Political Risks

Inflation

Currency Risk

Lack of Transparency

Financial Risks in Frontier

Markets

Page 9: Risks in frontier markets

Geopolitical risks are a serious concern in frontier markets.

A change of government may be accompanied by significant unrest and instability.

Geopolitical and Political Risks

Page 10: Risks in frontier markets

Inflation can erode investment returns substantially over a long period of time.

Inflation

Page 11: Risks in frontier markets

Most frontier markets suffer from a lack of transparency and have inadequate information sources.

Lack of Transparency

Page 12: Risks in frontier markets

The steep decline in some emerging market currencies highlights the risk posed by investing overseas.

Currency Risk