How can be information collected for Country Risk Assesment?
Data Collection
from offical or commercial sources (local or international organizations)
Local and international media on the country
The delphi technique
collecting various independent opinions
then averaging and measuring those opinions
Inspection visits
traveling to a country and meeting with government officials, market participants, the chamber of commerce and consumers to clarify uncertainties.
Must have sections of qualitative reporting on country risk:
Macroeconomic environment and Balance of Payments (BoP) highlights with outlook
Major political events, upcoming elections and relevance for real estate sector
Legal and tax changed initiated or completed with impact on real estate holdings
Potential for financial market and real estate market overheating
How to construct a Scoring or rating model?
What is rating supposed to measure?
Overall rating scale
Hazards considered and weight of each in the final result
Factors influencing and weighing in rating results for the hazard categories
Define how to measure each factor and data sources to be used. Design a scoring scheme for each factor that translates qualitative and quantitative measures into factor scores
How to find important factors and set weights:
Define and find Country risk events in history
Start from theory to identify risk factors and check against historic events. Did thr factors have an impact?
Use “gut-feeling” or more advanced statistical analysis to design a weighting system and derive rating results
Back-test your results against history and revise your system to get a better fit.
Last changeda year ago