According to the Milken Institute’s Global Opportunity Index (GOI), Europe is home to four of the top five favorite destinations for investors.
Denmark topped this year’s rankings, placing first in business perception, a measure of how easy it is to do business in a country, as well as other regulatory indicators.
The index includes 100 indicators organized into five categories: business perception, economic fundamentals, financial services, institutional framework, and international norms and policy.
Denmark scored third in economic fundamentals, which include macroeconomic performance, labor talent, and “efforts to create a resilient and sustainable economy and society,” according to the report.
According to the most recent GOI study, the following are the top five countries that attract investors:
- Denmark
- Sweden
- Finland
- United States
- United Kingdom
This year, the United States climbed one notch to fourth place, rating highest in the institutional framework category, which measures how well a country’s institutions defend investors’ rights and assets.
The country finished fifth in the financial services category, which assesses a country’s entire financial system as well as its access to financing.
Finland, which finished third overall, received the best score in the international standards and policy category, which assesses economic openness and the extent to which a country’s policies are aligned with global regulatory and intellectual property protection norms.
Emerging and developing Asia outperformed other E&D regions, accounting for more than half (53.2%) of money pouring into E&D countries between 2018 and 2022, according to the research.
According to Maggie Switek, Senior Director of the Milken Institute’s research department, investors seeking high-growth returns are still interested in emerging and developing economies, notwithstanding mature nations’ stability.
Malaysia emerged as the top Asian E&D economy, ranking 27th globally.
It offers the “best investment conditions” among all E&D economies and ranks well on institutional frameworks, in part because the country “has very strong investors’ rights,” according to Switek.
According to The New York Times, Malaysia is currently the world’s sixth largest chip exporter, accounting for 23% of all US chips.
Overall, E&D regions “offer attractive opportunities for investors interested in emerging markets with favorable growth potential,” according to the research.
However, rising tensions between the United States and China have reduced inflows to Asian E&D economies, which are expected to fall 75.4% in 2022, according to the report.
The world’s second-largest economy, China, ranked 39th. “That’s actually pretty high,” Switek told CNBC’s Squawk Box Asia. According to the IMF, the Asian economy is still expanding and developing.
“While China attracted more than half of total capital inflows to E&D Asia between 2018 and 2022, its appeal to investors appears to have decreased recently, likely due to rising geopolitical tensions with the US,” according to the report.
The following are the top ten E&D Asian countries according to the Global Opportunity Index:
- Malaysia
- Thailand
- China
- Indonesia
- Vietnam
- India
- Mongolia
- Sri Lanka
- Philippines
- Cambodia
Singapore topped Asia as investors’ favorite country in the region, ranking 14th globally. Hong Kong and Japan were placed 15th and 16th in Asia.