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From Precy Dumlao, Opalesque Asia:
Even if frontier markets lagged both emerging and developed markets in 2009, they may offer opportunities for the experienced investors this year, T. Rowe Price said.
The Baltimore-based global investment management organization said in a January investment commentary “Rethinking Equity Investment in Frontier Markets: Evolution breeds opportunity and diversification, while excess liquidity may prove advantageous,” that even as the asset class remains under-capitalized and under-owned, frontier markets have made large economic strides in recent years, with strong growth potentials. With sufficient resources, a manager can exploit market inefficiencies to generate good returns for investors.
It predicted that frontier and emerging markets would remain sustainable above developed markets and are likely to enjoy strong capital inflows. At the same time, smaller markets with low transaction volumes and market capitalizations benefit strongly from the loosening of liquidity conditions, which could be advantageous for frontier markets.
Fontier markets are getting some attention as Chicago-based fund manager Frontaura Capital told Opalesque last month that they were now where emerging markets were 20 years ago, after gaining 46% in 2009. Indeed, frontier markets may represent even larger opportunities for growth than emerging markets. Frontier countries are resource rich and their economies have benefited from the positive i...................... To view our full article Click here
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