Business Blog: Hoover’s Business Insight Zone

As they seek diversification, plenty of money managers are investing in “frontier markets” — i.e. stock exchanges in developing countries. Some of these markets, like those in Vietnam, are especially appealing because they aren’t heavily tied (or “geared”) to U.S. stock exchanges. In other words, they don’t go up or down in lockstep with the bigger bourses of the world.

For more, check out this interesting Marketplace interview (posted in both text and audio) with John Authers, investment editor of the Financial Times:

Prospecting in ‘frontier markets’

One of the things that has driven the emerging markets and which has helped countries like Brazil or Russia truly emerge, at least on some measures, is the huge booming commodity prices. If you’re a mineral-rich, or in other ways commodity-rich country in that band in southern Africa there are ways in which you could become a frontier market. Obviously you need to make some extremely careful decisions about the political system. There could be some very interesting bargains to be found there. You obviously have to do an awful lot of due diligence first.

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