As noted in this report from Seeking Alpha, frontier markets are apt to continue to become more and more common considerations for investors. In fact, even though this blog is partially oriented around such maverick investing environments, one can’t help but wonder – given the number of articles recently focused on frontier markets – if this trend is becoming akin to the shoe-shine boy offering stock tips before the Great Crash of ’29. Regardless, as the article notes:

“…the siren’s song of triple-digit returns in places like Kazakhstan and Jordan exists, and Standard & Poor’s debuted new metrics in the second half of 2007 to capture the performance of frontier markets, with a 30-stock Select Frontier Index and a broader Extended Frontier 150 Index.

Unfortunately, the top country in both S&P frontier indices is Pakistan, where the assassination of Benazir Bhutto and a resurgent Taliban (combined with the absence of a Wall Street Santa Claus rally) the Karachi Stock Exchange lost 9.9% off the KSE-100 benchmark’s value in just one week at the end of 2007.

With a continent-leading seven Kenyan companies also included in the Extended Frontier club, that country’s political turmoil is also hitting the S&P’s African all-stars hard….

…The first stop on your way to frontier market investment shouldn’t be Slovenia’s bustling Ljubljana Stock Exchange (just behind China’s Shanghai and Shenzhen for world-leading year-on-year gains from November 2006!).

…Perhaps most importantly, we are in the middle of a major worldwide process of stock market consolidation. The 24-hour trading day is now a reality not just for giants like Goldman Sachs with offices from Shanghai to Santiago, but also for ADR holders and ETF investors.

Ironically, it’s been with the help of frontier market money from Dubai in the United Arab Emirates (the #2 investment destination for S&P’s frontier funds), that U.S.-based Nasdaq (NDAQ) is set to take over the Scandinavian and Baltic exchange operator OMX, which I mentioned above. With over $5 billion in cash, the Persian Gulf petrocrats are moving some money north, only for Nasdaq to reward them with a cash and share exchange that brings a Middle East-Scandinavia-New York triangle of stock exchange power into being.

The Gulf states and their sovereign wealth funds are now turning the tables on traditional concepts of frontier markets as backwards, making up for lost time counting petrodollars and turning homegrown bourses like the Dubai International Financial Exchange [DIFX] into real market forces.

The IPO of port operator DP World in late November on the DIFX was the Middle East’s largest ever, with over 300 million shares trading for a market cap of nearly $5 billion. Even though they’ve got the loot to buy an entire European exchange system, Dubai traders want DP World to stay right at home….”