prs country reports

3
Quantitative Risk Global Expertise Independent Manage the risks and profit from global market uncertainty The world of country and political risk assessment has changed significantly over the last decade, with a plethora of views and approaches that can often obfuscate clear and balanced analyses. Since its inception in 1979, PRS’ Country Reports have provided multinational firms, hedge funds, risk managers, and traders with valuable insights and accurate data vital to short- and longer-term investment in assets in developed and emerging markets. What every report offers: 18-month and five-year regime probability forecasts for 100 countries using the Type IV error format; in-depth coverage of relevant political and country risk events, and up eleven types of government interventions that impact asset markets and the business climate; Counrty conditions (political players and institutions) and short- and medium-term economic forecasts; an independently backtested methodology, based on the world famous Coplin-O’Leary model of political risk, developed over two decades of research in conjunction with the CIA and the US State Department; How accurate are our Country Reports? Our Country Reports have been independently back-tested for their accuracy against other major commercial risk providers and found to be most accurate. What others have said about the PRS Group: “A leading organization in investment risk analysis....Jim Rogers, A Bull in China (2005) “PRS projections have been tested against foreign investor losses due to political reasons (using loss- claim data supplied by OPIC) and found to be the “most reliable.” Indeed, the “PRS model points to elements of the economic or business relationship that are most vulnerable to negative political influences.” L.D.Howell and B. Chaddick, “Models of Political Risk for Foreign Investment and Trade: An Assessment of Three Approaches,” 29(3), Columbia Journal of World Business (1994). PRS’ Country Reports are both informative and insightful. The firm’s long history of making the right calls, based on a range of possible regime types and their attitude towards international business, is unique to the field of country risk analysis.” John Manzella, President of Manzella Trade Communications, Inc. (2014) COUNTRY REPORTS

Upload: the-prs-group-inc

Post on 27-Jul-2015

42 views

Category:

Economy & Finance


0 download

TRANSCRIPT

Page 1: PRS Country Reports

Volatile Years, Steady CallsIn our January 2013 report on Egypt, PRS noted that the growing polarization of Islamist and secular political forces made the survival of President Mohamed Morsi’s government contingent upon the backing of the military, and it was our view that the government’s ability to maintain order and protect the interests of the armed forces would determine whether the regime could count on such support. As we predicted would be the case if the government failed to fulfill those conditions, the military forced Morsi and the Islamist government from power in July 2013.

In October 2013, PRS highlighted the risk of a renewed bout of destabilizing political demonstrations in Thailand if the PTP government made any moves to clear a path for former Prime Minister Thaksin Shinawatra to resume an active political career, and pointed to proposed amnesty legislation as a probable trigger for that negative development. That proved to be the case, and mass protests organized in response forced Prime Minister Yingluck Shinawatra to call an early—and ultimately inconclusive—election that has left the country on the brink of a governance crisis.

Since early 2014, conditions inside Venezuela have been characterized by spreading, and increasingly violent, episodes of political unrest that have shaken the foundation of the country’s socialist regime. In our May 2013 report on Venezuela, published shortly after President Nicolás Maduro’s victory in a special presidential election necessitated by the death of Hugo Chávez, PRS noted that the political impediments to addressing the economic imbalances produced by Chávez’s populist policies created a high risk of politically motivated turmoil. Our assessment was that the protests would be disruptive, but would not pose a significant threat to Maduro’s hold on power, and that remains our view.

Our February 2013 assessment of the outlook for political stability in Brazil highlighted the potential for unmet economic expectations and the government’s failure to tackle a serious urban crime problem to generate social unrest. As has been the case since the nationwide protests in June 2013, PRS forecast that the most significant impact would be a decline in the popularity of President Dilma Rousseff, a possibility that factored into the reduced probability that the October 2014 elections will produce another center-left government.

Polls in India suggest that neither the incumbent UPA bloc nor the main opposition NDA will win more than one-third of the seats in the Lok Sabha at elections that will be held this spring. As early as 2011, we forecast that smaller regional parties would gain at the expense of the two dominant rivals, creating a medium-term impediment to achieving consensus on a national agenda, and with the elections now just weeks away, the evidence is pointing strongly in that direction.

Quantitative Risk Global Expertise Independent

5800 Heritage Landing Drive, Suite EEast Syracuse, NY 13057-9378

Tel. +1 (315) 431-0511Fax. +1 (315) 431-0200

[email protected]

Manage the risks and profit from global market uncertaintyThe world of country and political risk assessment has changed significantly over the last decade, with a plethora of views and approaches that can often obfuscate clear and balanced analyses. Since its inception in 1979, PRS’ Country Reports have provided multinational firms, hedge funds, risk managers, and traders with valuable insights and accurate data vital to short- and longer-term investment in assets in developed and emerging markets.

What every report offers:• 18-month and five-year regime probability forecasts for 100

countries using the Type IV error format;• in-depth coverage of relevant political and country risk events,

and up eleven types of government interventions that impact asset markets and the business climate;

• Counrty conditions (political players and institutions) and short- and medium-term economic forecasts;

• an independently backtested methodology, based on the world famous Coplin-O’Leary model of political risk, developed over two decades of research in conjunction with the CIA and the US State Department;

How accurate are our Country Reports?Our Country Reports have been independently back-tested for their accuracy against other major commercial risk providers and found to be most accurate.

What others have said about the PRS Group:“A leading organization in investment risk analysis....”

Jim Rogers, A Bull in China (2005)

“PRS projections have been tested against foreign investor losses due to political reasons (using loss-claim data supplied by OPIC) and found to be the “most reliable.” Indeed, the “PRS model points to elements of the economic or business relationship that are most vulnerable to negative political influences.”

L.D.Howell and B. Chaddick, “Models of Political Risk for Foreign Investment and Trade: An Assessment of Three Approaches,” 29(3), Columbia Journal of World Business (1994).

PRS’ Country Reports are both informative and insightful. The firm’s long history of making the right calls, based on a range of possible regime types and their attitude towards international business, is unique to the field of country risk analysis.”

John Manzella, President of Manzella Trade Communications, Inc. (2014)

COUNTRY REPORTS

Volatile Years, Steady CallsIn our January 2013 report on Egypt, PRS noted that the growing polarization of Islamist and secular political forces made the survival of President Mohamed Morsi’s government contingent upon the backing of the military, and it was our view that the government’s ability to maintain order and protect the interests of the armed forces would determine whether the regime could count on such support. As we predicted would be the case if the government failed to fulfill those conditions, the military forced Morsi and the Islamist government from power in July 2013.

In October 2013, PRS highlighted the risk of a renewed bout of destabilizing political demonstrations in Thailand if the PTP government made any moves to clear a path for former Prime Minister Thaksin Shinawatra to resume an active political career, and pointed to proposed amnesty legislation as a probable trigger for that negative development. That proved to be the case, and mass protests organized in response forced Prime Minister Yingluck Shinawatra to call an early—and ultimately inconclusive—election that has left the country on the brink of a governance crisis.

Since early 2014, conditions inside Venezuela have been characterized by spreading, and increasingly violent, episodes of political unrest that have shaken the foundation of the country’s socialist regime. In our May 2013 report on Venezuela, published shortly after President Nicolás Maduro’s victory in a special presidential election necessitated by the death of Hugo Chávez, PRS noted that the political impediments to addressing the economic imbalances produced by Chávez’s populist policies created a high risk of politically motivated turmoil. Our assessment was that the protests would be disruptive, but would not pose a significant threat to Maduro’s hold on power, and that remains our view.

Our February 2013 assessment of the outlook for political stability in Brazil highlighted the potential for unmet economic expectations and the government’s failure to tackle a serious urban crime problem to generate social unrest. As has been the case since the nationwide protests in June 2013, PRS forecast that the most significant impact would be a decline in the popularity of President Dilma Rousseff, a possibility that factored into the reduced probability that the October 2014 elections will produce another center-left government.

Polls in India suggest that neither the incumbent UPA bloc nor the main opposition NDA will win more than one-third of the seats in the Lok Sabha at elections that will be held this spring. As early as 2011, we forecast that smaller regional parties would gain at the expense of the two dominant rivals, creating a medium-term impediment to achieving consensus on a national agenda, and with the elections now just weeks away, the evidence is pointing strongly in that direction.

Quantitative Risk Global Expertise Independent

5800 Heritage Landing Drive, Suite EEast Syracuse, NY 13057-9378

Tel. +1 (315) 431-0511Fax. +1 (315) 431-0200

[email protected]

Page 2: PRS Country Reports

How to use Country Reports:

Client surveys have identified the following major uses for our Country Reports:

• Allocate equity, bond and currency exposures

• Develop long and short trading positions

• Assess the viability of new or existing business operations

• Evaluate security risks to facilities and personnel

• Brief upper level management and colleagues

• Supplement outside sources of information

• Develop strategies for negotiations

• Identify key people and institutions

• Expand headquarters research and analysis

• Temper unvetted sources of information

Who uses Country Reports?

• International bankers: to evaluate current credit risks and potential threats to creditworthiness.

• International business executives and risk managers: for briefing prior to country visits, locating new markets, globally, and to manage ongoing and potential risks to foreign assets.

• Asset managers and strategists: to be aware of future events that could affect positions and overall fund exposure.

• Economic strategists: to obtain vital, up-to-date statistics to a range of oftentimes obscure countries.

A few of our clients that depend on Political Risk Services for unparalleled country risk analysis include:

British American Tobacco, Capital One, Duke University, Ernst & Young, European Central Bank, Harvard, HSBC Global Asset Management, John Hopkins University, McKinsey & Company, Millennium Challenge Corp., Overseas Private Investment Corp., Princeton University, Samsung, University of Notre Dame, CIA, World Bank / IMF, Yale University.

Page 3: PRS Country Reports

Headquarters5800 Heritage Landing Dr., Suite EEast Syracuse, New York 13057

Tel. +1 (315) 431-0511 Fax +1 (315 431-0200Email: [email protected]

Michael BurkeDirector of Client Relations

[email protected]+1 (315) 413-0511 ext. 311

About the Firm and CEOEstablished in 1979, The PRS Group is among the earliest commercial providers of political and country risk forecasts. Originally the Political Risk Services division of Frost & Sullivan, Inc. and then of UK-based IBC Group (now known as Informa), the firm was acquired in 2010 by Gavea Emerging Markets Corp., thus broadening its client base and areas of expertise.

Both PRS and Gavea are headed up by Dr Christopher McKee, a former faculty member at the University of British Columbia. Christopher has worked in the private and government sectors, conducting due diligence assessments of limited recourse financing projects, formulating sovereign debt sustainability models, and constructing micro-financing facilities. Christopher is the author of several publications dealing with international business and risk, and has lived and worked in a range of emerging markets including Latin America, South East Asia and North Africa.