Valuation Approaches to Frontier Equity Markets
Pre-emerging equity markets mostly do not enjoy the benefit of being thoroughly researched by a large number of sell-side security analysts. Moreover, security analysts covering pre-emerging markets may not be as experienced as their colleagues covering more mature emerging markets — particularly for those reasons spelled out in chapter 1. Their learning experience, in many cases, is a direct function of the age and maturing process of the frontier emerging market itself.1 In addition to the lack or relative unreliability of equity coverage during the initial stages of the transformation from a pre-emerging market to a mature emerging market, accounting standards and audits can be characterized as having severe shortfalls in accuracy and standardization.
KeywordsEquity Market Market Segmentation Risk Free Rate Political Risk Payout Ratio
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