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Four of the five favorite destinations for investors are in Europe, according to the Milken Institute’s Global Opportunity Index (GOI) report..
Denmark topped this year’s rankings, scoring first in business perception, a measure of the ease of doing business in a country, as well as other regulatory metrics.
The index taps into 100 indicators across five categories: business perception, economic fundamentals, financial services, institutional framework and international standards and policy.
Denmark ranked third in economic metrics that capture macroeconomic performance, workforce talent and “efforts to create a resilient and sustainable economy and society,” according to the report.
These are the top five countries that investors find attractive, according to the latest IAS report:
- Denmark
- Sweden
- Finland
- United States
- United Kingdom
The US moved up one place to fourth place this year, ranking highest in the institutional framework category, which tracks the protection a country’s institutions offer to investors’ rights and assets.
The country ranked fifth in the financial services category, which assesses the overall financial system in a nation as well as access to finance.
Finland, which ranked third overall, ranked highest in the international standards and policies category, which assesses economic openness and the extent to which a country’s policies align with global regulatory and intellectual property protection standards.
Emerging and developing Asia performed well compared to other E&D regions, drawing more than half (53.2%) of capital inflows to E&D countries between 2018 and 2022, according to the report.
“While advanced economies provide stability, investors seeking high-growth returns continue to show interest in emerging and developing economies,” Maggie Switek, Senior Director of Research at Milken Institutehe said to a statement.
Among Asian E&D economies, Malaysia emerged as an investor favorite and ranked 27th globally.
It has the “best investment conditions” among all E&D economies and ranks well in institutional frameworks, partly due to the fact that the country “has very strong investor rights,” Switek said.
Malaysia is also now the world’s sixth largest chip exporter and packs 23% of all US chips, according to The New York Times.
Overall, the E&D regions “offer attractive opportunities to investors interested in emerging markets with favorable growth potential,” the report said.
Rising tensions between the US and China, however, have hit inflows to Asian E&D economies, down 75.4% in 2022, the report added.
The world’s second largest economy, China, came in at 39th place. “This is actually very high,” Switek told CNBC’s Squawk Box Asia, adding that it is still an emerging and growing Asian economy according to the IMF.
“While China attracted more than half of total capital inflows into E&D Asia between 2018 and 2022, its appeal to investors appears to have declined recently, likely due to rising geopolitical tensions with the US,” the report said.
Here are the top 10 Asian E&D countries in 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 and ranked 14th globally. Hong Kong and Japan ranked 15th and 16th, respectively, in Asia.