International Credit

One of the most difficult aspects of doing business internationally is the lack of reliable credit risk information for many countries. In this section, CP will provide insight into the financial, economic and political risks of various countries around the world.

Recent Articles

Other than oil, the telecommunications industry has been a major area of growth in Nigeria in recent years but only a few companies are publicly traded.

The Nigerian government took the unusual step last week of urging the country's telecommunications companies to become publicly listed on the Nigerian Stock Exchange (NSE) face regulatory penalties, according to an article in Bella Naija, a Nigerian online media outlet.

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Tomorrow's election could prove pivotal as Nigeria tries to cope with a sharp drop in oil prices, chronic corruption and an ongoing Islamic insurgency.

As many as 56 million Nigerians are expected to go to the polls tomorrow as Nigeria, a West African nation of 170 million people, vote in what is expected to be the most important and closely monitored election since the country gained its independence from Great Britain 55 years ago.

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A combination of factors make this EU country, and its capital market, the one to watch when monitoring the credit and financial risks of Europe.

In the immediate aftermath of the 2008 global financial crisis, one European country was spared the worst of the debt crisis even though it had as much debt as any other EU country.  It's avoidance of early trouble and potential for big trouble make this country a bellweather for EU solvency. 

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The risks associated with Russia's economy and political system have become so great that even the richest Russians are no longer taking a chance on the country that bore them their wealth.  Putin: "I am confident that we should finally close, turn the offshore-page." 

On September 17th of last year, news rippled through Russia's wealthy elite that billionaire Vladimir Yevtushenkov, the largest shareholder of the Sistema conglomerate, had been accused of money laundering and placed under house arrest.

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Although a key market, China's economy differs from the economies of most developed countries in five key respects, according to the country's own publicly-traded companies. "Everybody wants a piece of China."

Ancient Chinese philosopher Laozi, the founder of Taoism, said in the sixth century B.C., "Rule a big country as you would fry a small fish [with little stirring]...the more prohibitions there are, the poorer the people become."  In this article, CreditPulse reports on the five key economic risks related to doing business in China.

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Global domestic credit as a percent of GDP declined slightly in 2011, according to data from the World Bank.  Some countries have room for expansion while others are nearing the end of the line.

In recent years, the industrialized world's appetite for credit has created mountains of debt primarily in the form of bank loans and bond purchases.  Many of these countries are over-banked -- relying too much on banking and credit to achieve economic growth.

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Many of Spain's banks are in real trouble although the country's two largest -- Banco Santander and BBVA -- appear to be holding steady.  "Bad debts held by Spanish banks are at a 17-year high."

The Spanish government's decision to nationalize Bankia SA, the country's fourth largest bank, last week with a $24 billion bailout, the largest in Spain's history, effectively served notice that Spain's banking problems are worse than previously thought.

 

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Increased signs of political unrest in South Africa, the contintent's most developed nation, prompted Moody's to lower its credit outlook on the country from stable to negative.  "Political uncertainty is overplayed."

"For the first time ever in the 16 years of freedom and democracy, we see black and white South Africans celebrating together in the stadiums and fan parks," said South African President Jacob Zuma during last year's World Cup hosted by South Africa.  Get the details of why Moody's lowered South Africa's credit outlook in addition to other risk information.

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Equity capital is fleeing the debt-ridden economies of Europe, particularly EU market countries, in droves as evidenced by huge declines in their stock markets for the third quarter of this year.  One bright spot: Slovakia.

To no ones surprise, Greece's stock market, the Athens Stock Exchange, was battered in the third quarter of 2011 declining 45.3 percent from July to September, according to a quarterly performance ranking of the world's 65 major stock markets released earlier this month by the Wall Street Journal.

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Credit ratings firms fail to see sovereign defaults coming soon enough and have typically been too late in issuing key downgrades of government or sovereign debt.  "Once a crisis is obvious, it's obvious to everybody."

The three major credit ratings firms -- Standard & Poors, Moody's and Fitch Ratings -- have a poor track record in predicting sovereign defaults soon enough to save creditors and investors, according to analysis of 35 years of data conducted by the Wall Street Journal.  Read below to learn more about sovereign defaults and the countries that have defaulted since 2001.

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