Topics in Emerging Financial Markets: Direct Investment

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Presentation to Acer Group, Inc.

• Topics in Emerging Financial Markets Direct
  Investment

Alan Jaffe Yelena Leyderman Alex Raytburg
Elina Stunis
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Hourly Compensation Growth Historical Trends
Taiwan Mexico Portugal Sri Lanka
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Hourly Compensation Growth Other Factors
The Next 5 Years

• Projections Methodology
• Compound Growth Rate Calculation
• Comparison with the United States
• In 1998 US Labor Cost was 18.56
• By 2003 it will rise even higher
• Exchange Rate Issues
• Union Strength, Labor Specialization
• Logistics
• Labor Productivity Real Wage Rate

Growth 2003 Wage Taiwan
11.80 9.15 Mexico 0.96
1.92 Sri Lanka 2.28 0.53
Portugal 5.56 7.18
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Economic Statistics Competitiveness Rankings
MICI Ranking 1999 1998
Competitiveness Ranking 1999 1998
1997
Country
Portugal 29
33 27
26 29
Mexico 34
39
31 32 32
Sri Lanka 50
43
48 39 48

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Economic Statistics At a Glance
Agriculture Industry Services
Portugal Mexico Sri Lanka
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Exchange Rates A Time Series Analysis
Since 1990, the situation was very different for
the four sample currencies.
Rate
MXN Currency Crisis
PTE/XEU
SLS
TWD
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Political Risk Rankings
Political Risk Rankings

• In Sri Lanka, The Tigers have been waging a
  bloody guerilla campaign to establish a homeland
  for the island Tamil Hindu minority. This
  conflict has claimed 61,000 people and displaced
  more than a million of the countrys 19 million
  inhabitants

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Political Risk (Continued)

• Degree of political stability (elections, party
  agendas)
• Civil wars or guerilla activity
• Respect for law and order (functioning court
  system)
• Strong tradition of civilian government (no
  juntas in recent history)
• Anti-foreign feelings
• Overall feel of the nation...

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Numerous Factors Have to Be Weighed Properly
Investment Decision
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Analysis of the Various Aspects of the Decision
Decision Factors Breakdown
25
50
25
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And the Winner Is