Regional security risks are the most volatile factor affecting investor confidence in economies that are vulnerable to external threats, a report has found.
Verisk Maplecroft's Global Risks and Resilience Atlas assesses the prevalence of 14 cross-border "global risks" and eight resilience factors in 198 countries to identify the economies that are most vulnerable to external threats, which include global demand shocks, regional insecurity, environmental disasters, resource insecurity and pandemics.
The risk analytics firm said the markets with "extreme" regional security risks were: Lebanon, Pakistan, Kenya, Cameroon, Egypt, Niger, Iran, the Central African Republic and Turkey. It added that "spill-over violence from conflicts" and terrorist attacks are two elements that impact on the security risks of a country.
The report said nearly half (46%) of the reported cross-border attacks from February 2014-2015 took place in countries in the Middle East and North Africa.
More than 40% of the countries of that region were categorised as "extreme" or "high" in the report's regional security risk index.
This was mostly the result of ongoing conflicts and terrorism originating from Iraq, Syria, Libya and most recently, Yemen.
The study also found East Africa had almost 20% of countries categorised as "extreme" or "high" risk in the index. Kenya was placed third on this list as a result of its proximity to Somalia. Thirteen reported cross-border terrorist attacks from terror group Al-Shabaab have taken place in Kenya, resulting in 78 deaths.
Terrorism has also affected the nation's tourism sector. As of March this year 30,000 people had lost their jobs and 25 hotels were forced to close, the Kenya Coast Tourist Association has said.
Charlotte Ingham, principal analyst at Verisk Maplecroft, said: "Investors assessing a country's long-term risk outlook need to understand both its exposure and resilience to cross-border shocks.
"The building blocks of resilience are good governance, strong institutions and effective infrastructure - these enable a country to put preventative programmes in place and bounce back quickly from a significant global risk event."