The Best and Worst Frontier Markets in H1 of 2017

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Despite market volatility hitting multi-year lows, 2017 has been an exciting year so far and the performance in Emerging and Frontier markets have been promising. Here is a summary of the performance so far by region:

Summary of Returns by Region, H1 of 2017:

Every region is up on the year so far, with Europe the clear winner due in large part to a rally in EUR/USD. Africa has performed admirably on the strength of its local markets rather than on large currency moves.

Best Frontier Markets in the First Half of 2017:

Europe had 3 of the top 5 frontier markets in 2017 so far, with the 8% gain in EUR augmenting returns.

Best Market: Latvia: +32.22% YTD (42.74% in USD terms)

Latvia’s OMX Riga Index has steadily gained all year, but half of its performance has occurred over the past month. This recent move higher can be attributed mainly to Latvijas kuģniecība, aka “Latvian Shipping Company” (LSC), an oil tanker company. Their stock jumped 51% on June 15th on an investment from Vitol Netherlands worth 19.62% of LSC. Aside from this M&A news pushing markets higher, Grindeks, a pharmaceutical company, is up over 73% on the year. Both these stocks are part of the main index and have been the main contributors to the move.

Worst Frontier Markets in the First Half of 2017:

The Middle East was the hardest hit region with the 3 worst markets in 2017 all from the region. Political strife was a major reason for the performance so far.

Worst Market: Qatar: -15.47% YTD (-17.58% in USD terms)

Oil and natural gas prices failing to bounce back did not help the market early in the year, but Qatar’s stock market has suffered recently due to the political pressure and sanctions placed on it by Saudi Arabia and 3 other Middle Eastern nations. The currency also depreciated by 2.5%, a significant amount for a pegged currency.

Snapshot of All Frontier Markets’ Performance YTD:

Here is a snapshot of all the frontier markets we track, and their performance so far in 2017. You can always track them on our Frontier Market Dashboard.

 

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