CAPITAL MARKET
Capital
markets can be identified through a country, whether the country is a developed
country or a developing country is classified. Indicators are the per capita
income of a country, which is usually included in the low for middle-income
countries. However, the most striking characteristics are the market
capitalization of listed companies, cumulative trade volume, tight capital
market regulation, sophistication and culture to domestic investors. Indonesia,
which is still listed in IFC, is still a developing country with the worst
investment climate in East Asia. Even with such records, we are still
considered by foreign investors.
The
main reason for foreign investors to transfer their funds to developing
countries is that developing countries have the potential of a wholly untapped
business, as in the classic motives of investments to other countries. Michael
Fairbanks and Stace Lindsay senior consultant at the Company monitor's goals
reveal foreign investors coming to poor countries usually only see
opportunities to attract natural resources, cheap labor and wages as target
products or services that are not of good quality.
But there are other
reasons that accompany the motive, a striking difference with developed
countries. If we use a life-cycle approach to developing countries' efforts
into growth categories (growth) than developed countries fall into the mature
category. This means that there is an appeal of high economic growth which of
course is accompanied by high return as well, because economic growth is an
indicator of aggregate industry in a country.
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