Sentiment studies are published all the time. But how can you decide which ones are worth listening to? Last week we reported on a study that looked at investor sentiment towards equities on a country-by-country basis.
The research looked at the Nordic region in particular and found levels of positive sentiment towards Finnish equities to be lower than their Nordic peers. When I questioned an IRO from a prominent Finnish company about the market in Finland, he was reluctant to believe that analysts and investors viewed the market in this way. He argued that in our open, competitive global economy, national considerations were rather irrelevant. But national peculiarities of regulation and the like do make a big difference. As we all know, countries like the UK benefit greatly from their more flexible regulatory structure. Maybe the answer is that companies are more susceptible to the negative repercussions of regulations than investors - the extra investor protection offered in the states doesn't appear to have led to an influx of international investor there.
In fact it seems that if anything, socio-political and regulatory considerations are often ignored by investors. Many on the buy side are driven by the search to find the next BRIC and this would explain the current spate of companies beating a path to Nigeria, a land now perceived as being one ripe for investment despite its also being rife with tensions. This would also seem to suggest that the importance of the nation state is still with us, and will not be diminished by globalization.