Few risks to consider in a developing market

1
RISK FACTORS TO CONSIDER BEFORE
INVESTING IN DEVELOPING MARKETS
Developing markets are extremely attractive to
investors, not just because it allows them to
diversify their portfolio but also because it
allows them a chance to gain unique returns. But
investing in developing markets comes with its
own share of market risks which can be slightly
more unpredictable. It is, therefore, important
for investors to understand these associated
market risks that they must try to mitigate.
http//www.coface.se/
2
POLITICAL RISK
A risk resultant of a change in government or
government policies, political risk is a broad
term that also includes in its gamut events like
trade agreements, labor laws, terrorism, war,
coups, and elections.
3
LIQUIDITY RISK
In developing markets, where there are few buyers
and sellers, exiting an investment and converting
to currency may be difficult. Called liquidity
risk, investors may have to continuously decrease
selling price to find a buyer in such a scenario.

4
FOREIGN EXCHANGE RISK
Exchange rate volatility and unstable currencies
make investment in developing markets a risky
affair. This risk due to exchange rates movement
which can negatively impact investors is foreign
exchange risk.
http//www.coface.se/Vaart-erbjudande/Kreditfoersa
ekring/Single-Risk