Investors cling to frontiers as emerging markets sink -
http://www.reuters.com/a...r-idUSBREA140RL20140205
Quote:As emerging markets tumbled this year, the riskiest country groupings on the fringes have been a haven.
Small markets, local stories and in some cases pegged currencies backed by strong central bank reserves have shielded frontier markets from the worst of the emerging market rout.
The benchmark MSCI frontiers index has eked out a 1 percent rise in total returns this year, but that compares with a 7.4 percent loss in emerging markets and a 5.4 percent drop in developed stocks.
But frontier stocks and bonds rose in 2013, boosted in markets such as sub-Saharan Africa by a stronger growth outlook.
Frontier markets, so-called because of the relative difficulty of getting in and out of them, have won far less international investment than emerging markets and so have been less prone to the flight of speculative hot money.
Emerging stocks are a trillion-dollar market, of which $300 billion is in ETFs, compared with less than $20 billion under management in frontier stocks, according to estimates by banks and fund tracker EPFR.
However, some of last year's frontier darlings are now feeling the heat of the global sell-off.
Nigerian stocks, which soared 43 percent in 2013, have fallen 2.5 percent in 2014, the naira is trading below its 150-160 per dollar band, and the central bank says hot money remains in the system.
Mauritian stocks have fallen after rallying 20 percent last year, domestic bond yields have risen and the central bank governor said this week that rates should be raised to prevent capital flight.
"We are seeing continuing outflows of emerging markets, week in, week out, we have seen some panic," said Feriani.
"Frontier markets have remained uncorrelated, that won't go on forever - I am a bit cautious."
Mpesa bank is struggling with the 12/- handle. Plenty of selling here since Jan 24th. Resistance clouds forming at this level.
EABL, Member and KCB still signalling further dips coming. The volume moves on Jan 24th were clustered on the sell side.
I'll keep on stating this until its clear. This year risk management will be important. Easy gains won't be a walk in the park like in 2012 and 2013...
I saw something on FT about the KE eurobond might be delayed till March... Anyone else spotted this - cc @mwekezaji, @deal, @vvs, @guru na wengine?
$15/barrel oil... The commodities lehman moment arrives as well as Sovereign debt volcano!