Hong Kong — Seven emerging economies at risk of an exchange-rate crisis are Sri Lanka, SA, Argentina, Pakistan, Egypt, Turkey and Ukraine, according to a new analysis by Nomura.

With five of the seven already in a currency crisis or a programme run by the International Monetary Fund (IMF), that leaves SA and Pakistan as the standouts.

At the same time, the eight countries with the lowest risk of a crisis are Brazil, Bulgaria, Indonesia, Kazakhstan, Peru, Philippines, Russia and Thailand, according to analysts including Robert Subbaraman, Singapore-based head of emerging-markets economics.

"This is an important result," they wrote in a note Monday. "As investors focus more on emerging-market risk it is important not to lump all emerging markets together as one homogeneous group; Damocles highlights a long list of countries with very low risk of full-blown crises."

Nomura’s findings are based on an early-warning model — called Damocles — set up to identify exchange-rate crises for 30 emerging economies. The model examines a variety of factors including foreign-exchange reserves, debt levels, interest rates and import cover.

It has predicted two-thirds of the 54 developing nation exchange-rate crises since 1996, up to a year in advance, according to the analysts.

"The results we have achieved are encouraging, but given the inherent limitations of any early warning system it would be foolish to make any exaggerated claims," they said.

Damocles refers to the moral parable of the Sword of Damocles, an allusion to imminent and ever-present danger.