Emerging Market Investment Checklist

Evaluate {COMPANY} ({TICKER}) as an emerging market investment in {COUNTRY}:

1. COUNTRY RISK ASSESSMENT
   - Political stability: regime type, upcoming elections, policy predictability.
   - Rule of law: contract enforcement, IP protection, judicial independence.
   - Country credit rating and sovereign CDS spread trend.

2. CURRENCY RISK
   - Local currency trend vs. USD over 1, 3, and 5 years.
   - What % of revenue is USD/EUR-denominated vs. local currency?
   - Does the company have natural hedges (export revenue, USD debt)?
   - Central bank FX reserve adequacy (months of import cover).

3. CORPORATE GOVERNANCE & SHAREHOLDER RIGHTS
   - Is this a state-owned enterprise (SOE) or private? SOE = political risk embedded.
   - Dual-class shares, VIE structures (Chinese cos.), or complex holding structures?
   - Minority shareholder protections: dividend payment history, related-party transactions.
   - Auditor quality: Big 4 or local firm? Any audit qualifications?

4. REGULATORY & NATIONALIZATION RISK
   - Is the industry subject to price controls, windfall taxes, or strategic asset classification?
   - Any history of regulatory or political interference in this sector in this country?
   - Sanctions risk: is the company or country on any watchlists?

5. LIQUIDITY & MARKET ACCESS RISK
   - Average daily trading volume vs. your intended position size.
   - Are foreign ownership limits close to their cap? Any restriction on repatriation of profits?
   - What happens to your investment if capital controls are imposed?

6. VALUATION DISCOUNT JUSTIFICATION
   - EM stocks typically trade at a discount to DM peers. Is the discount wide enough?
   - Required discount to compensate for country + governance + currency risk.

7. VERDICT
   - Invest / Watchlist / Avoid — with rationale.
   - Maximum position size given the risk profile (% of portfolio).