[PEN-L:342] Country risks

[Aditya Chakrabortty <aditya@xxxxxxxxxxxxxxxxxxxxx>]

Hi,

Perhaps some of you are interested in this?

Check this:

At 136 of 180, Russia is now below Ethiopa, Togo and Bangladesh in how banks rates its risk for investment.

Last yr it was 78.

more at www.euromoney.com.

               COUNTRY RISK

               How the mighty are falling

               It's a measure of the turmoil in world markets that not a single bank was at first prepared to
               supply the forfaiting rates used by Euromoney in its calculation of these country-risk rankings.
               So fast were things changing that even these usually stable indicators became too volatile.
               Banks supplied them on request on a day-by-day basis to clients an indication of how difficult
               trade finance, the lubricant of the real economy, was becoming. The story of this year's table is
               Russia. The former superpower drops 51 places, below even non-reformist ex-Soviet republics
               such as Uzbekistan, below Tajikistan, Pakistan and Kazakhstan. Default, particularly default
               accompanied by government threats to impose hyperinflation, scares away lenders and investors
               much more effectively than small size or straightforward poverty. Japan too is starting to pay
               the price for the paralysis of its political process and the consequent stalling of banking and
               economic reform. The country is now in danger of losing contact with its supposed peers in the
               developed world. Similar falls by Thailand, Korea and China confirm economists' downgrades
               of performance for the rest of 1998 and while Malaysia's unorthodox economic protectionism is
               going down well in the country, its 21-place crash shows foreign institutions are getting anxious.
               Research by Rebecca Dobson

Best wishes

Aditya