Gustavo Galindo, senior portfolio manager of the $300 million Russell Frontier Markets Equity Fund from Russell Investments, thinks the sell off in frontier market stocks is generating some opportunities to snap up beaten-down assets:
“A lot of people chase performance so we’re not going to see as much interest in frontier markets this year. But this is when we’ll find opportunities—those neglected gems… Our managers are talking about there being more opportunity, and about the growth of frontiers outperforming emerging markets.”
Despite recent political upheaval, Galindo believes Bangladesh is the most promising frontier market over the longer term along with Vietnam:
“The macro trend of manufacturing shifting toward those economies [from China] offers considerable potential… With the growth in manufacturing, you’ll see more people employed, which drives a pick-up in the consumer sector.”
However, he also had these words of caution about Vietnam:
“The local market tends to be volatile so it’s difficult to find good entry points. And for foreign investors like us, opening accounts is not as easy.”
Finally and despite being punished by falling oil prices, Galindo had this to say about one of Africa’s largest economies:
“Nigeria may create targeted value opportunities. There are some good companies there that will be unfairly punished so there is tremendous amount of upside once the situation clears.”
To read the whole blog post, Gun-Shy Investors May Miss Bargains In Wake Of Selloff, go to the website of the Wall Street Journal. In addition, see our lengthy article about investing in Vietnam: Apocalypse Now For Investors? A Realistic Vietnam Investment Review
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