Frontier Markets

Via The Financial Times, a report on one institutional investor’s views on frontier markets.  As the article notes:

“…Frontier market valuations have fallen significantly over the past two years and are attractive, according to BlackRock, which is launching an investment trust to take advantage of the opportunity.

“We think it is the right time to be in frontier markets as they have not yet reached their potential,” said Sam Vecht, head of BlackRock’s emerging Europe, Middle East and Africa equity team, and fund manager.

“They are the fastest growing countries in the world in terms of GDP, have a lower debt burden than emerging and developed markets and show low correlation to both.”

The BlackRock Frontiers Investment Trust, which aims to raise between £80m-£100m from institutional investors, has an expected yield of more than 3 per cent. The fund will be more heavily weighted to countries such as Qatar, where Mr Vecht likes financial stocks, and Nigeria with exposure to financials and consumer companies. It will be less exposed to companies in countries such as Pakistan, where political risk runs high, or Vietnam and Tunisia.

Investors will be offered an exit out of the fund at the end of five years at net asset value less costs but can buy and sell their shares on the open market at any time during this period. The placing closes on December 10 and the fund will be listed in London the following week.”

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Wildcats & Black Sheep is a personal interest blog dedicated to the identification and evaluation of maverick investment opportunities arising in frontier - and, what some may consider to be, “rogue” or “black sheep” - markets around the world.

Focusing primarily on The New Seven Sisters - the largely state owned petroleum companies from the emerging world that have become key players in the oil & gas industry as identified by Carola Hoyos, Chief Energy Correspondent for The Financial Times - but spanning other nascent opportunities around the globe that may hold potential in the years ahead, Wildcats & Black Sheep is a place for the adventurous to contemplate & evaluate the emerging markets of tomorrow.