Posted by: Armel | October 25, 2009

Frontier Markets in Play




The noticed inflow of  fresh foreign investment into emerging markets, should raise growth prospects in Frontier Markets in Sub-Saharan Africa.

According to recent published data, foreign investments into emerging markets are reaching record levels unseen in 25 years. This resurgence of foreign capital into developing economies pushed the brazilian government to create a new 2% tax on these foreign capital inflows. Although this rule was deemed necessary to halt the rise of the local currency (Real), it’s nonetheless unprecedented for emerging countries to pass such precautionary measures.

On the flip side, once the valuation of local investments in Brazil, China, and South Africa can no longer sustain this continued flow of capital, the underlying assets would need to expand beyond their traditional borders into frontier markets (for revenues). When all is said and done, Frontier Markets will represent the only untapped source of  potential growth sought after by investors, and it might take diversification & expansionist strategies by emerging markets – business leaders – to get there.


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