Risk Management:What Companies Must Know

Companies must understand threats before going into a market,said Chris Torrens,director of global risk analysis at Control Risks.It's just about mitigating against that risk.There's a clear security risk in many markets.The longer term risks may be less obvious to begin with.There's corruption and social risk of the need to work with local communities or face security risk.*
The challenge arises when you have unforseen events such as the crash of MH-17 in Ukraine or an ash cloud.We tend to be drawn to those areas where conflict occurs or is likely to occur.As a company,we focus on political,operational and security risk.Many companies are just used to the bad headlines.Different risks cause different problems for different companies.*
The risk environment feels at this moment to be around a 7.5 or an 8,but many of these are recurring,ongoing crises.Ukraine is a major worry,but it's about being prepared,Mr.Torrens explained.*
One example of a current European risk is the possibility that,if natural gas is shut off from Ukraine,Germany will run out of it in February.

Risk and the Markets Today

There's a wall of worry out there,said former Ronald Reagan advisor and CNBC contributor John Rutledge-the Middle East,Russia/Ukraine and the South China Sea-but the Fed has added three trillion dollars,which is leaking into the economy through the banks.That's why prices are gonna continue to go up,I think.
For me,the two big bets to make are private equity firms and real estate.I think the small stocks are a bet to make-small caps over large caps;the US over Europe;avoid Japan.
I think the rates are headed up from here,although the fear buying is pushing them down right now.*
The Saudi stock market is planning on taking a risk and opening more to foreigners in the first half of 2015.The Saudis want to increase foreign investment;diversify away from oil;and be represented in the MSCI and other large indexes.Companies such as Kingdom Holding and Alrajhi Bank will be available to foreign investors,but only if they are institutional traders with at least five billion under management and have been in business at least five years,a draft document says.Saudi Arabia has a half trillion dollar market,the last of the large closed markets.*
This MH-17 shootdown has become a huge human drama,said Senator Dianne Feinstein,D-California,Chair of the Senate Intelligence Committee.I think the nexus between Russia and the separatists has been established.I think the world has to rise up and say we've had enough of this.You cannot let this kind of thing happen.
The fact of the matter is,to me,this kind of missile that travels at 2-3 times the speed of sound-there have to be some penalties for this kind of a shootdown.This kind of weapon has been given to separatists that are in many respects thugs.Russia-US relations are now at Cold War levels,Senator Feinstein told CNN's Candy Crowley.