Macro Intelligence Early Warning Service
MIEWS is a businessman’s service, indicating existing macroeconomic imbalances that are known to cause tightening or currency crises in emerging markets. It is intended for exporters, producers and investors with exposure in or plans for emerging market countries.
Example of uses
- Staff assumptions may become better informed by knowing they will be challenged by central management using MIEWS
- Staff assumptions may be more risk attentive by drawing on MIEWS when drafting business proposals
- Upon signals/forewarning, internal ratings may be downgraded, investors go underweight and business plans be revisited
...and users:
- Management
- Treasury
- Controllers
- Regional or business area managers
- Analysts
This service does not seem to exist anywhere today, but is increasingly needed because of major changes going on in the international financial arena as a consequence of globalisation.
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MIEWS is intended to help businesses to improve profitability by enhancing profits and holding back losses. It is a decision support service for businesses having exposure in, on or to emerging markets.
Exposure may be in the form of
- sales to or purchases from
- production in
- financing of
- placement/investment in
- transportation activities to and from
- competition from producers in particular emerging markets.
Local macroeconomic imbalances may affect the business prospects of international firms negatively:
- The local government may tighten its budget or raise interest rates to reduce demand in the country which should affect sales and production plans to the country
- Prospects of higher local interest rates or a fall in the local currency should influence decisions on investment into that country
- Among consequences to be expected from such developments the stock market may face a fall A depreciated local currency may benefit local exporters of e.g. commodities, sharpening international competition.
- Due to economic tightening or currency problems that is to be expected among signalling countries a downturn in economic activity should be expected further down the road which may affect e.g. foreign trade volumes and freight markets
MIEWS is intended to support corporate decisions by shedding light on country prospects. The kind of decisions concerned may include:
- Decisions on country exposure (internal ratings may be adjusted and internal capital pricing adjusted etc, hedging may be seen as an option)
- Direct investment decisions, whether to finance a project e.g. through the local banking system or by a capital injection from the mother company
- Business plans and budgets may be revised in the light of events above
- Weighting decisions of international investment funds
- Activity plans of logistics/transportation companies
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