From PriceWaterhouseCoopers :

 Businesses Looking to Invest in Emerging Markets Should Look Beyond the BRIC Countried, New Report Suggests

 Companies considering direct investment in emerging economies should look at a broad range of possible destinations and weigh up the balance of both risk and reward when making their final decision, according to a new report from the emerging markets group at PricewaterhouseCoopers LLP.

The best known emerging markets – in particular the BRIC (Brazil, Russia, India and China) countries – have definite attractions, but they may not always be the optimum choice for foreign direct investment in either the manufacturing or services sector, the report The PricewaterhouseCoopers EM20 Index – Balancing Risk & Reward points out.

The inaugural PricewaterhouseCoopers EM20 Index is an innovative ranking of 20 key emerging markets according to their relative attractiveness for overseas investment. Separate rankings have been generated for stylised manufacturing and services businesses, reflecting their differing investment criteria. For manufacturing companies seeking to invest in businesses overseas, low production costs are a key requirement; for services companies seeking to sell to domestic markets, emerging economies with relatively high per capita income are generally the most attractive.

Vietnam takes the top spot as the most profitable emerging market for manufacturing companies followed closely by China, Poland, Chile and Malaysia. On the services side, the United Arab Emirates leads, followed by Saudi Arabia, South Korea, the Czech Republic and Hungary.

The PricewaterhouseCoopers EM20 Index is based on a model, developed by PricewaterhouseCoopers economists, which closely mimics the methods used by companies in the real world when deciding where to invest. Unlike other indices, the PricewaterhouseCoopers EM20 incorporates both reward factors (economic fundamentals such as GDP per capita, projected economic growth rates, taxes, transport costs and tariffs) and risk aspects (country risk premia derived from bond market data, which act as a proxy for the market’s view of country risk).