Asian Frontier Markets vs. World Stocks

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Contra
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Asian Frontier Markets vs. World Stocks

Postby Contra » Sat Jul 21, 2018 12:34 pm

It is true even frontier markets negatively impacted in the past few months as a result of fear over the U.S.-China trade war. Some frontier markets already had bull markets and it is natural to have correction or pull back there. Investors or traders always will worry for something. But stock markets have gone up with all types of worries.

I believe the current market turmoil is an opportunity to gain exposure to these growing Asian frontier markets. Asian frontier markets are in a similar phase of growth as other emerging markets such as China and India were 10-15 years ago in terms of per capita GDP. In addition, the long-term correlations of Asian frontier markets with developed markets continue to be very low. Can investors ignore industrialization, rising middle class, and improving infrastructure backed by attractive valuations and low correlations?

Trailing 12 months P/E ratio

Sri-Lanka= 9(the lowest among Asian frontier markets)

MSCI World index=19.4

Other Asian frontier markets also have attractive trailing P/E ratio

Ideas well come. Thanks
Company, stock market, politics and the economy are four different things.

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Contra
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Re: Asian Frontier Markets vs. World Stocks

Postby Contra » Sat Jul 21, 2018 1:34 pm

Company, stock market, politics and the economy are four different things.

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Contra
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Re: Asian Frontier Markets vs. World Stocks

Postby Contra » Sun Jul 22, 2018 7:44 am

Promising sectors in Asian frontier markets

Opportunities in each country vary by industry.

Agriculture and food: In countries such as Sri-Lanka, Bangladesh and Vietnam, the agriculture and food sectors are expected to grow significantly thanks to population growth, growing middle classes and urbanization. They were Agriculture oriented economies in the past and now they have expanded in other areas such as tourism, port and shipping, textiles and garments etc.

Infrastructure: Opportunities in the infrastructure sector are increasing in this frontier thanks to population growth and urbanization.
Retail, consumer durables and electronics: Significant growth is expected in this sector too in Asian countries such as Vietnam, Sri-Lanka and Bangladesh. The increasingly affluent middle class drives demand in the retail and consumer electronics sector. The e-commerce industry also looks particularly promising.

Other sectors and manufacturing and service sectors:There will be top winners in above areas in frontier markets. Coming numbers in the coming years will not lie. It is very interesting to watch their hidden growth not only in the coming financial year but also in the coming decade. There is a possibility these economies could rerate as pre emerging countries or emerging countries during next 10 years.

Each country will have different types of opportunities. Even the automotive industries are gearing up. You find the most expensive vehicles on their roads. How can we say they are poor? Only thing is there is a poor class in these countries and poor and rich gap is widening never before throughout the world now.
Company, stock market, politics and the economy are four different things.


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