Where are the best prospects among emerging nations? Not in the Brics countries, according to data on business optimism in 44 developed and emerging markets collated by Grant Thornton International, a network of business advisory firms. For the first time since it began collecting the data a decade ago, none of the Brics is among its top five countries. Continue reading »
2012 was a great year for frontier-market hard-currency bonds, and Angola hopes to get in on the action in 2013. The oil producer announced on Friday plans to raise $1bn from a debut eurobond issue later this year. Continue reading »
It is the ultimate in risk versus return. Hunters of investment exotica are heading to Africa, where some of the world’s riskiest markets are enjoying big gains.
After trailing behind more mainstream markets for the better part of a decade, so-called frontier markets as defined by index provider MSCI have climbed more than 8 per cent already this year – outpacing both emerging and developed stock markets. Continue reading »
Investors in EM equities have done well from the recent global rally, with gains in the $-based MSCI emerging markets index of 7 per cent since December 1 and nearly 13 per cent since September 1.
But the big winners have been the smaller frontier markets. Argentina tops the list with a 28 per cent advance since December 1, followed by Romania on 27 per cent and Serbia on 23 per cent. The sceptics might say, ‘So, what?’ Little bourses tend to be more volatile than their larger fellows. But Citi’s Andrew Howell thinks he has spotted an interesting and potentially profitable change. Continue reading »
Is El Salvador, a poor Central American country struggling to overcome a violent history, a safer bet than Portugal? And is Mongolia, a country that has been rescued five times in the past 22 years by the International Monetary Fund, a better investment thesis than Spain?
Frontier markets have raised a lot of excitement among investors but they are not always easy to invest in. Many of the more exotic exchanges are not fully open to foreigners.
Handily, MSCI, the index provider, on Wednesday launched a Frontier Markets 100 index – a subset of its existing MSCI Frontier Markets index, designed to be easier to trade in and track. So what’s new? Continue reading »
While interest in frontier market debt may be waxing, international investment in frontier equity markets has waned considerably of late.
After robust inflows over most of 2010, funds dedicated to frontier markets and tracked by EPFR Global, a data provider, have suffered a five month streak of net outflows. Investors have now withdrawn money for nine of the past 12 months, cutting the total assets under management to $7.5bn. Continue reading »
By Robert Johnston and Divya Reddy of Eurasia Group
Mining companies have been busy scouring investment frontiers that they once avoided. The world’s seven largest gold-producing companies are all developing major projects in frontier markets, including Papua New Guinea, Kyrgyzstan, Mauritania, and Ecuador.
Geologically-attractive deposits (especially for gold, and to a lesser extent, copper) in politically-stable countries are scarce today, while large, untapped deposits in frontier markets offer greater promise. However, this shifts risks from below- to above-ground. The world should brace itself for an increase in supply disruptions for key commodities. Continue reading »
Tired of the usual investment advice on the Brics? On the lookout for new up-and-coming countries? Here are few recommendations that you might not have considered.
Control Risks, a consultancy which looks mainly at political and security risks around the world, released a report called RiskMap 2012 on Monday – with some intringuing investment pointers. Its top five? Bulgaria, Colombia, Libya, Mozambique, and Sri Lanka. Continue reading »
To say that frontier markets have become hostage to the eurozone crisis would be an understatement. Markets have perceived the inability of European policy makers to find a solution to the euro crisis as so momentous, so troublesome, that for the time being at least, the individual identities of frontier sovereigns have to some extent been suppressed.
Indeed, performance among frontier sovereigns has been very highly correlated in the last couple of months. Continue reading »
By Gabriel Sterne, senior economist at Exotix Limited
Warren Buffett’s quote: “It’s only when the tide goes out that you learn who’s been swimming naked” became immortalised during the global financial crisis, and since then the emerging market tide has come back in and frontier markets have been riding the crest of the QE-supported wave. But the tide has started to turn again in Q3, posing the questions of ‘How far will it recede?’ and ‘Are there any naked bathers?’. Continue reading »
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