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Mark Whitehouse

The Riskiest Emerging Markets

By one measure, Brazil and India are on top.
A precarious pursuit.

A precarious pursuit.

Photographer: Yasuyoshi Chiba / AFP / Getty Images

Investors worried about emerging markets face a vexing question: Which countries are actually the riskiest? By one measure -- corporate leverage -- Brazil and India stand out, though for China and Turkey the answer depends on how you look at it.

As I noted last week, one indicator of risk is how much companies borrow for each dollar in equity -- leverage that makes them more vulnerable to declines in income and to credit freezes. By this measure, nonfinancial companies in emerging Asia, Eastern Europe and Latin America as a whole are more levered than they’ve been in at least a decade, and more than companies in the U.S. and Europe.