Tags: frontier | stock | emerging | markets

Frontier Stock Markets Outperforming Emerging Markets

By    |   Monday, 03 February 2014 10:22 AM

While emerging stock markets are tumbling, frontier markets, which are smaller and have less liquidity, are thriving.

The MSCI Frontier Markets Index has risen 0.85 percent so far this year, compared with a 6.6 percent drop for the MSCI Emerging Markets Index. In 2013, frontier markets gained 16 percent, while emerging markets slid 12 percent.

Frontier markets include Kenya, Kuwait and Pakistan. The frontier markets haven't been subject to the currency crises suffered by emerging market countries such as Turkey and South Africa.

Editor’s Note:
38 Trades That Could Turn $1,000 Into $49,000

In addition, most frontier countries are unaffected by China's slowdown, which has hit the exports of some emerging market countries, such as Brazil, The Wall Street Journal notes. Many frontier countries are more reliant on domestic consumption for their growth.

Capital flows into frontier markets have been less volatile than those going into and out of emerging markets, according to The Journal.

"Frontier markets are very useful diversifiers, because . . . there are fewer links between frontier markets and the international capital markets," Sean Lynch, global investment strategist at Wells Fargo Private Bank, tells The Journal.

"We are attracted by the long-term growth prospects and the consumption-growth story."

As for emerging markets, not everyone is distressed by their decline.

"Normally [when emerging markets fall], the response is one of joy and happiness because we are able to buy stocks a lot cheaper," Mark Mobius, executive chairman of Templeton Emerging Markets Group, tells the Financial Times.

"We're happiest when markets are down. . . . We want to take advantage of any declines in these markets."

Editor’s Note: 38 Trades That Could Turn $1,000 Into $49,000

Related Stories:

© 2019 Newsmax Finance. All rights reserved.

   
1Like our page
2Share
InvestingAnalysis
While emerging stock markets are tumbling, frontier markets, which are smaller and have less liquidity, are thriving.
frontier,stock,emerging,markets
300
2014-22-03
Monday, 03 February 2014 10:22 AM
Newsmax Media, Inc.
 

Newsmax, Moneynews, Newsmax Health, and Independent. American. are registered trademarks of Newsmax Media, Inc. Newsmax TV, and Newsmax World are trademarks of Newsmax Media, Inc.

NEWSMAX.COM
MONEYNEWS.COM
© Newsmax Media, Inc.
All Rights Reserved