Egyptian Unrest Renews Fears Over Political Risks Of Investing In Emerging Markets

Reuters analyses how political unrest in Egypt is boosting food and fuel prices and renewing fears about political upheaval in countries that have become popular investment targets.


On a practical level, investments in emerging economies will probably become more expensive as investors demand a higher risk premium. Some investment funds clearly will flow away from emerging markets and into other sectors, as well.


In the meantime, Standard & Poor’s and Moody’s cut Egypt’s credit rating, and some investors already are betting on a comeback in the Egyptian economy.
 

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