Serkin - Frontier: Exploring the Top Ten Emerging Markets of Tomorrow

This edition first published 2015

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Library of Congress Cataloging-in-Publication Data

Serkin, Gavin, 1971

Frontier : exploring the top ten emerging markets of tomorrow / Gavin Serkin.

pages cm

Includes bibliographical references and index.

ISBN 978-1-118-82373-6 (cloth)

1. Investments, ForeignDeveloping countries. 2. InvestmentsDeveloping countries. I. Title.

HG5993.S467 2015

332.67'3dc23

2014041647

Cover Design: Wiley

Cover Image: Sky Shutterstock.com/Pakhnyushchy;

Landscape Shutterstock.com/Anton_Ivanov

For my parents, Tricia & Stanley, and the memory of epic caravan journeys

&

My late father-in-law, Victor, who summed up these hundred thousand words in three: What, another holiday?

Gavin Serkin has been writing about developing economies for the best part of two decades as the Editor of Portfolio International magazine and more recently as the head of the emerging markets international desk at Bloomberg News in London.

His work keeps him in touch with some of the biggest investors and world leaders, chairing conference panels on issues from African development and Chinese growth to Islamic finance.

Gavin led Bloomberg's coverage of the credit and derivatives markets from 2004 to 2008, winning the Society of American Business Editors & Writers' Best in Business Award and the Society of Professional Journalists' Deadline Club Award. His team's exposure of problems brewing in the littleunderstood world of collateralized debt obligations provided warnings of the subprime mortgages disaster about to unfold.

Gavin has a joint honors degree in Economics & International Relations. He lives by the sea in Whitstable, England, with his wife and son.

Financial markets and conditions can change rapidly, therefore the views in this book shouldn't be taken as current statements of fact nor should reliance be placed on them when making investment decisions. They shouldn't be considered as advice or a recommendation to buy, sell or hold a particular investment. Opinions expressed by named individuals don't necessarily reflect the views of the companies that employ them. Some of the individuals or their employers may have dealt in the investments discussed. As such, the book contains information and opinion on investments that doesn't constitute independent research, and therefore isn't subject to the protections afforded to independent research.

Photography by Gabriel Rotich, A24 Media

Henry Miller

Where's the best place in the world to put your money?

So far this decade, it's a country deemed so doomed it's listed with the ten most fragile states; a place where modern-day slavery, violence and the breakdown of law and order rank it among the three worst hellholes on the planet.

Between deadly attacks by the Taliban, strikes by US drones and the secret missions to monitor Osama bin Laden, shares in Karachi soared, extending 1000% gains this century.

It's not just Pakistan.

In the face of terror and global economic shocks, some of the biggest investment rewards are turning up in the most vulnerable of places. Assets in impoverished, radicalized or seemingly impenetrable corners of the world are often wildly discounted. Even a glimmer of hope for political stability or improvement in the economy can spark a major rally ().

Plucky seven

Note: Data compiled by Bloomberg as of December 2014. Table excludes Venezuela Stock Market Index and Lusaka Stock Exchange All Share Index because of restrictions on repatriating foreign-currency returns or data constraints. Base currency: US dollar. (Function: WEIS GO).

At one time such countries were looked upon as exotic by a few -investors while mostly dismissed as basket cases. Now they form a -growing -investment universe known as the frontier markets a gateway before the more -mainstream emerging and developed markets that have trillions of -dollars of investment funds competing to buy assets. While some rank as frontier because they have restrictive investment laws or tiny markets, most are poor or riven by conflict.