Bloomberg’s Most-Promising Frontier Markets 2015 List


Bloomberg had a special report on Emerging Markets for the March 2015 issue of its Markets magazine, and included a “Most-Promising Frontier Markets” list. Given the relative dearth of attention to frontier markets, we were pleasantly surprised to see the features and took a deeper look into their rankings. You can find the article here.

The Rankings

Bloomberg ranked 19 frontier countries in total. We won’t list the entire thing here but here are the top and bottom 5 along with their scores:

Top 5:

  1. Saudi Arabia (78.8)
  2. Estonia (71.4)
  3. Slovakia (67.1)
  4. Lithuania (65.8)
  5. Bahrain (65.7)

Bottom 5:

  1. Venezuela (23.2)
  2. Ukraine (38.1)
  3. Argentina (40.6)
  4. Nigeria (43.6)
  5. Pakistan (44.9)

The Middle East and Eastern Europe Dominates

Despite oil’s lackadaisical performance this year, Middle Eastern countries performed well with Saudi Arabia and Bahrain in the top 5. Their large war chest of USD from the boom years of oil are supposed to buoy them through this period, and the future liberalization of the Saudi Arabian stock market were both positives.

Eastern Europe was also well represented with Estonia, Slovakia, Lithuania, Slovenia, and Bulgaria all in the top 7 of the rankings. A big contributor to this performance was in the relative cheapness of their equities on a price-to-book basis; the sell-off across Europe last year has led to P/B ratios hovering around 1.0 for most of the region. The relative ease of doing business in these countries also helped their rankings despite more anemic growth rates.

South America Looking Gloomy

Poor growth, bureaucratic business infrastructure, and ongoing struggles with their devaluating currencies have Venezuela and Argentina faring poorly in these rankings. With the political upheaval in both these countries, change is also unlikely in the near-term.

Key Omissions

We track over 60 frontier markets in our dashboard, so Bloomberg’s list covering 19 markets is a bit on the short side. Africa was represented solely by Nigeria. This means large markets like Ghana and Kenya were mysteriously absent, as well as long-running successful markets like Botswana. Large South Asian countries which performed amazingly well last year such as Bangladesh and Sri Lanka, were also not included.


Bloomberg’s used 19 different indicators to score countries for their rankings.

Here are the splits:

Economic – 40%
– GDP growth
– inflation
– government debt as % of GDP
– total investment
– current account balance
– labour participation rate
– foreign reserves
– WEF infrastructure score

Financial – 40%
– P/B ratio
– liquidity of the primary equity index
– FX volatility
– two year sovereign debt CDS spreads
– Economist IU’s banking risk score

Political and Social – 20%
– Transparency International’s CPI score
– EIU’s political risk score
– World Bank’s ease-of-doing business score- adult literacy score

It’s a fairly standard list of criteria, and similar to how we compiled our Shalifay 30.


photo credit: Manama Arialview via photopin (license)

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