Asian Companies Listing on AIM

In the past few decades, the Chinese economy has experienced phenomenal growth. And while growth had since slowed, it can’t be ignored that in 2014, China became only the second country in history (after America) to achieve economic output in excess of $10 trillion. In fact, even at the current rate of growth, China expected to surpass the US as the world’s largest economy within the next two decades.

It is no wonder then that foreign investors have been looking for ways to benefit from the Chinese success story. And there are plenty of Chinese investment opportunities right here in the UK. SMEs in China have long struggled to secure capital from Chinese banks and that has sent them elsewhere, including London’s AIM market.

But more recently, the reputation of Chinese AIM listed companies has taken a serious hit. It seems that after a few scandals involving Chinese companies, the market has lost faith in all of them. The problem for most Chinese companies therefore seems to be the result of suspicion and rumour. Of course, this is unfair – the Quindell and Tesco scandals have not resulted in investors blacklisting every UK Company.

So the question is, what can Chinese companies do to increase their appeal to UK investors and continue to tap a valuable source of funding through the AIM market? The simple answer: Transparency. After all, the best way to quash suspicions and rumour is by getting the truth out. So for any Chinese companies listing in London, effectively communicating to potential investors from the beginning is critical – and there are plenty of ways to do this.

The suspicions surrounding Chinese companies listing in London are largely fuelled by a literal lack of visibility. So first and foremost, Chinese companies seeking admission to the London Stock Exchange need to bear in mind that potential investors are based abroad and therefore not able to directly observe the day to day operations of the business. Transparency, achieved in part through increased publicity, is therefore key to bolstering investor confidence.

But an effective communications program requires much more than reaching out to the UK national and investor press only briefly ahead of the IPO. Companies need to communicate through wider media outlets and for a longer period of time in the build up to Admission in order to achieve a successful and hopefully oversubscribed fundraising.

One way to do this is by launching Corporate profiling exercises on the home front. Even when targeting a predominantly overseas audience, the relevance of local and trade press coverage should not be underestimated before an IPO.

This is particularly salient for smaller companies. UK journalists are unlikely to have heard of an Asian based SME considering an AIM IPO. If British journalists can discover an existing profile through good trade and local press coverage (and where appropriate a social media profile) as they go online for further information, it will increase the likelihood of positive UK press coverage at IPO.

Local media coverage is also important for investors, as it plays a key role in reassuring their confidence. If a company attempts to promote itself amongst UK investors without an already established press profile, it could make a company’s story, no matter how compelling, harder to believe. And given the current climate of suspicion, that is risk Chinese companies simply can’t take.

Simply put, a proactive communications program is strong evidence of a company’s willingness to honour its commitment to new and existing shareholders. And, perhaps more importantly, increased transparency will help reassure investors and help regain trust of the market. This strategy will not only help Chinese companies: With London seeking to cement its status as the world’s leading financial centre there is simply no way investors here can dismiss companies operating in a country set to become the world’s economic powerhouse.

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Weekly Wrap Up: The Great Firewall of China

Will economic ambitions force Beijing to liberalise internet policy?

In the build-up to the unveiling of China’s answer to Apple, Xiaomi’s new smartphone this week, a source leaked to Reuters that they had previously been approached by Facebook CEO Mark Zuckerberg about a possible investment, but that the deal fell through.

The meeting between Zuckerberg and Xiaomi CEO Lei Jun came ahead of the smartphone maker’s $1.1 billion fundraising last month. That brought the company’s valuation to $45 billion, making Xiaomi the world’s most valuable start-up just four years after being founded. In fact, Xiaomi now comes in just behind Samsung and Apple in sales, meaning it is one of the top three smartphone makers in the world. So it’s pretty obvious why Zuckerberg was eager to go into business with Xiaomi.

Why, then, did the talks fail? It was said that part of the reason Lei turned down the offer was due to the potential political fallout of selling a stake in his company to Facebook. The U.S. social network is banned in China. It’s all part of a bigger effort by the Chinese government, which is afraid of the impact of a free internet. This has led to the implementation of all sorts of controls, dubbed the ‘Great Firewall of China’, and the blacklisting of a number of popular social media sites. In 2009, Facebook was added to that list.

Facebook is hardly alone in this regard. A more recent example came at the end of 2014 when Google’s Gmail was blocked. There was a huge outcry, including complaints from business travellers who could no longer access their email. Their Chinese counterparts were also frustrated with the increasing difficulty of conducting business internationally.

Both the failed Facebook/Xiaomi deal and the Gmail ban highlight the difficulty that international companies can face when investing in China. It is essential that any PR strategy takes into account that many means of communication are banned. Words must be carefully chosen because both domestic and international companies can have their online presence shut down completely if they violate the ban.

It is a delicate balancing act. Consider the example of Yahoo!, which decided to comply with China’s restrictions. Yahoo! then came under fire in the U.S. and found themselves defending their decision to Congress. The Company then had to admit that that it could not protect the privacy of its Chinese customers from authorities. One customer whose identity was turned over to authorities was sentenced to 10 years in prison. Obviously, when this news leaked it resulted in plenty of bad press for Yahoo! outside of China. 

The internet ban is certainly something to consider for any company wanting to do business in China. Ultimately, the economic implications of this firewall could be a far greater threat to sentiments amongst citizens than any online communications would have been. In order to facilitate cross-border investments, it is vital for the CCP to revise its media policy. For a little advice, Communist Party leaders might want to Google the phrase, “it’s the economy, stupid.” Oh wait. They can’t.



This week Abchaps hosted a market lunch with a focus on Asia. The group discussed the market sentiment and how Asia-based companies are developing in the London market in order to gauge future investor interest. Abchaps also celebrated David Brennan’s recent promotion at Gowlings to celebrate his. We congratulate him again on reaching Partner at the firm.



Charles Stanley appointed Peter Geikie-Cobb, formerly at F&C to head its Matterley business, with a new bond fund to be provided. Meanwhile, Ian Williams, previously at SGH Martineau,joined Baker Tilly as the International Lead for its Restructuring and Recovery service line. Eric Pang joined JLL to lead its UK markets group China desk.



“Great Firewall of China”- a term to describe Internet Censorship in China under a variety of laws, administrative regulations, and execution effort



Celebrate having Scotland as part of the UK tonight by attending the Ceilidh Club Burns Night – London’s biggest Burns Night event. With three hours of energetic ceilidh dancing and a buffet dinner of traditional Scottish haggis, neeps and tatties, it is a great way to socialise, exercise and have a laugh with friends!

If you are around Greenwich over the weekend or next week pop into the Royal Observatory which hosts the Astronomy Photographer of the Year competition. The free exhibition showcases remarkable feats of astrophotography entered into four categories: ‘Earth and Space’, ‘Our Solar System’, ‘Deep Space’ and ‘Young Astronomy Photographer of the Year’ for under-16s.

Take the opportunity over the weekend to visit The Nation Gallery’s exhibition which has become one of London’s biggest attractions since opening last week. ‘Rembrandt: the Late Works’ shows just four self-portrait canvases and a tiny etching by Rembrandt Harmenszoon van Rijn, all made during the last 11 years of his life. This may not sound like a great deal but tell that to the queues outside the National Gallery!

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Weekly Wrap Up: A Flow of Israeli IPOs

Is London well positioned to capture the next wave of Israeli tech IPOs?

There has been hype and a buzz in the City this week about the number of Israeli tech companies that are currently eyeing a listing in London. Companies include digital advertising company Matomy who now has ten global offices in Israel, Spain, Germany, Mexico, San Francisco and New York and employs 400 people. The Company is looking to raise £60m which will value it at between £200 and £300m. Another is digital advertising Company, Marimedia.

Israel, dubbed the 'start up nation', is the second largest source of innovation after Silicon Valley and is the third largest source of listings on New York’s NASDAQ. Global tech companies, Apple, Google, Intel and HP have been building up their research and development operations in Israel, making the country a major tech hub in its own right. Its leading tech companies have engineered cutting edge medical technology such as Given Imaging, a producer of swallowable camera pills.

Inspiring Innovation
Source: Oliver Thompson - Flickr CC

News of foreign tech companies, particularly from this innovative market, choosing to come to London to list is welcome news; London must do all it can to attract these companies. For too long London has failed to do so due to the lack of fund managers and analysts focusing on tech. Many argue that London’s capital markets are too immature in this respect when compared to NASDAQ or even NYSE, and until London sees a consistent number of tech companies floating successfully on the London Stock Exchange (LSE) then investors will continue to go to the US to tap into its attractive infrastructure, analysts and flourishing IPO market. Was it presumptuous of Joanna Shields, Tech City Chief, to claim in October 2013 that London had reached parity with New York when one of the most exciting companies and gaming giant, King chose to float in New York last year?

Nonetheless, London has been making positive steps to capture this market and the most attractive sector for growth. The LSE launched the “High Growth Segment” (HGS) in March 2013 with the goal of enticing firms to the market; companies wouldn’t have to comply with the usual free-float rules and would also be able to list by selling as little as 10% of their equity. This initiative has been received positively by fast growing companies, and according to Marcus Stuttard, Head of UK primary markets at the LSE, there is a rising interest in the broader IPO market. It is hoped that the arrival of Facebook and Google as established presences in East London will bring a new wave of commercial expertise. The government has also launched its Future Fifty scheme, designed to attract and support online entrepreneurs to push the UK into the front of the global race in this respect. These are all great initiatives, but more will be needed to ensure that London successfully rides the next wave of Israeli tech companies looking to IPO.



Abchaps welcomed Mazars Finance and Corporate Finance teams into our offices and heard about their focus on Israel, as well as their specialist sectors: media, technology and telecoms. We also entertained some special guests at Chelsea, who were victorious over Newcastle 3-0 at Stamford Bridge.



Love wasn’t the only thing in the air this week; promotions and new appointments were also on the cards at a number of top City firms. Our friends at Cavendish Corporate Finance appointed Joe Stelzer as a managing partner after four successful years at the Company.

Octopus Investments announced that Debu Purkayastha is to be their entrepreneur-in-residence at the fund management Company. No doubt he will use his previous experience at Google to drive the business forward with his keen eye for exciting new opportunities. In the legal domain, Pinsent Masons have also now appointed Michael Ruck as a senior lawyer in its corporate crime team.

Finally, following our client Lighthouse Group’s announcement last week that Rowan Dartington had been brought on board, the Group have also appointed Mark Evans as business development director, moving over from his senior executive position at Pearl Assurance.



'BitTag' – In a week where the burgeoning BitCoin industry was writ large across our newspaper headlines, our tech-loving friends over in East London introduced the ‘BitTag’ concept. BitTags are physical price tags that provide the consumer with a real-time indication of an item’s price according to market fluctuations, displaying both local currency and BitCoin value.

“Darling, you’ve left the BitTag on my valentines day present. This may have been a pricey gift at Harrods, but you could have got it at a knock-off price with BitCoin, you cheap…”



It’s the big Valentine’s Day today, so whether you have been struck by Cupid’s love arrow or are single and ready to mingle, the City is hosting numerous options for both love and lust...

Instead of gazing longingly into each others eyes over a candlelit dinner, get physical with some couples’ aqua zorbing or a ‘Lovers Leap Bungee Jump’! 

For you singletons, fear not – love could be found exploring the beautiful and the ugly at the Natural History Museum’s Valentine’s Day Night Safari. Alternatively, head to Bounce club for its anti-val, strictly no kissing, just ping pong night of partying!


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Chinese companies an improving bet for investors

As the global economy gradually recovers, the investment community in London is expecting a vibrant capital market with surges of IPOs and M&A activity. For the City, IPOs of Chinese companies have gained increasing attention from advisers.

However, the question remains: why should Chinese companies list in London as opposed to listing in their own country, or even Hong Kong? What makes the London stock market attractive for Chinese companies to list?

A year of slower, but concrete, growth in China

Over the past year, investors have been aware of the stagnation in growth of the Chinese economy. In 2013 China experienced its slowest growth since 2000, with only 7.6% increase in GDP, and PMI dropped from 52.5% in November to 50.9% in January 2014. This was partly caused by the US Government’s decision to trim the quantitative easing that had previously encouraged inflows of ‘hot’ money into China. The Chinese government has also brought in tighter controls on shadow banking, including non-government backed banks. Shadow banking was a major source of finance for local governments to facilitate projects which were carried out to meet the central government’s growth initiative targets.

Such concerns, however, do not diminish investors’ optimism towards investing into Chinese companies. Many are attracted to the long-term benefits brought about by recent measures introduced by the Chinese government.

Government reforms drive share price as IPO moratorium is lifted

In November 2013, the Chinese government put forward what has been termed as the biggest “reform package” since the 1990s. One of the most significant changes was the relaxation of China’s strict “Hukou” policy (a policy restricting internal migration from rural to urban areas), which is expected to facilitate urbanisation. Another significant change was the easing of the One-Child policy. Both are expected to encourage much greater demands for consumer products in the future.

The Chinese government has long been attempting to rebalance its current export-dependent and investment-intensive economic model to a more sustainable one that will be led by internal consumption. However it will take time for these measures to come into effect. What is certain, however, is that steady growth will continue in China backed up by relatively concrete and sustainable economic activity.

Various industries have benefited from the recent introduction of these new government initiatives with many Chinese businesses enjoying share price increases. Consumer goods shares were amongst the obvious winners. Companies related to baby products, such as HKSE quoted Goodbaby International, as well as dairy products makers Mengniu Diary and Yashili International soared following the reform announcement.

With the Chinese government increasing its green targets to counter the environmental effects of urbanisation, other winners were those in the renewable energy industry. HKSE quoted Wind-farm operator China Longyuan Power Group Corp saw its share price increase by 86% over the year, whilst Hanergy Solar Group Ltd. saw an increase of over 100%.

Industries that are expected to perform well going forward include the insurance industry, benefited by the Chinese government’s relevant tax policies, and exporters, benefiting from the recovering US and European markets.

In late December 2013 China reopened its market for domestic IPOs, following a moratorium imposed by the government in October 2012 as part of an attempt to reform the capital markets in China. As a result, analysts have predicted 2014 will be a good year for the Chinese stock market. Coupled with confidence in the long-term consumer market, it should be an excellent year for Chinese companies to raise funds in China.

Variety and flexibility of listing in London contribute to continuing popularity

Despite these optimistic predictions, however, Chinese companies are still choosing to list overseas and particularly in London.

London certainly provides more exposure for companies that wish to “go global”. For Chinese companies wishing to expand their business to Europe, London is strategically important and is the undisputed City of choice for a European headquarters. The City of London’s strong track-record of dealing with Africa also makes it favourable for Chinese companies wanting to expand their businesses there.

Furthermore, as the world’s most established stock market, the market regulations in London are undoubtedly more predictable and reliable than the Chinese mainland markets. Stock markets in mainland China are still subject to regulatory changes which makes the market less predictable as regulators seek to mitigate overpricing in the market. Recently, five companies which had announced their intention to list in China have retracted their intentions and postponed their IPOs following newly released rules which strengthen government control on stock price valuations.

Another advantage of listing in London is the flexibility of the London Stock Exchange when compared to, for example, the Hong Kong Stock Exchange where the process is comparatively complicated. On average, it takes two years for a company to list on the Hong Kong Stock Exchange. For smaller companies, this might not be a viable option with the time and financial costs involved. London’s Main Market on the other hand is well-known as having a faster listing process whilst maintaining supervision over public companies. London’s Alternative Investment Market (AIM) also provides an important channel for SMEs to list, with simpler listing procedures and the supervision delegated in part to a Nominated Adviser (NOMAD), who project manages the new issue.

The increasing sophistication of AIM has also made it a more appealing option. In 2013, 25% fewer companies left AIM compared with 2012. £881 million was raised in equity, 70% more than in 2012. Government initiatives have now made AIM stocks eligible for placement in ISAs and these additional tax benefits make AIM-shares even more attractive to investors. In addition to this, from April 2014, AIM shares will be the most tax-advantaged of all investments with exemptions from inheritance tax and stamp duty.

London emphasises its pro-China position

David Cameron in China
to promote UK trade, 2013
Source: The Guardian

The UK’s desire to promote trade with China has never been more obvious. Stories on Chinese investment into the country, and vice versa, have been dominating headlines over the course of the past year, followed by David Cameron and Boris Johnson’s multiple visits to the country.

Although the number of Chinese companies listing in London has fallen slightly in recent years, it is anticipated that IPOs of China-based businesses will increase, particularly bearing in mind what London has to offer. Priding itself on being the world’s most established financial centre, London would certainly be a strategic option for Chinese companies wishing to gain access to international investors. The capital markets remain an interesting place to watch as advisers expect greater deal flow from China in the near future.

Canace Wong

Canace is an Account Executive at Abchurch Communications. Brought up in Hong Kong, she is fluent in Cantonese and Mandarin. Canace has a Master’s Degree in Philosophy and Public Policy from the London School of Economics and is a key member of Abchurch’s China and Asia team.

Follow us on Twitter @AbchurchComms

Key insights into Chinese London listings

Today we hosted a China Advisor lunch in our London office to discuss the City’s reception to Chinese business and how it could be improved in the future. The idea for the event came about at the beginning of the year when one of our Chinese clients Camkids plc, based in Fujian province, received a spontaneous round of applause at the end of its presentation to a group of private client investment managers. The audience was clearly impressed to see this Chinese business performing ahead of expectations and the share price enjoying a healthy climb since its first day of dealing on AIM. We know that other Chinese companies do not always experience the same positive reception in London and were keen to find out what could be done to improve the situation.

The lunch was co-hosted by John McLean who has been involved in China since the late nineties and has significant experience as a UK Director of a number of Chinese businesses. He is also a Board member of the China-Britain Business Council and Chairman of VSO China. 24 China advisors and key influencers attended what was the first ever gathering of its kind in the City to address the specific issues of lack of institutional appetite, actions the City could take, and what Chinese companies wishing to list in London should do. Some guests gave short speeches which encouraged the debate; these included an analyst viewpoint of recent Asia deals, the LSE’s strategy towards China and institutional attitudes to Chinese business. Our office was transformed into a beautiful Chinese influenced dining space.

To get a better understanding of the City's opinions of Chinese business, we sent out a brief survey with the invitees asking three questions:

• Why is the investment community often reluctant about investing in Chinese business?
• What actions could be taken in London to improve this situation?
• What actions should a Chinese company consider to make a successful London listing?

We received a lot of very insightful responses and are currently undertaking a keyword analysis to determine the findings of the survey.

However, a snapshot analysis has given some interesting insights. The top reason given for the reluctance to invest was poor market performance, with corporate governance issues being a close second. Respondents to the survey thought that the best action London could take to improve the situation was better market/ City education for Chinese businesses, and the top-line action a Chinese company should consider before a London listing is to appoint English speaking Directors to the Board. While it is already a requirement to have at least one English speaking Director, it shows that the Chinese businesses may not be communicating their updates effectively enough.

We thoroughly enjoyed hosting the event and engaging in some challenging and thought provoking discussions; judging by the feedback that we have already received the guests had a great time and learnt a lot too. We look forward to hosting more events similar to this in the future.

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Is London Recession Proof?

There has never been a clear definition of exactly where the ‘North-South divide’ is but according to figures released last month it might as well be the M25, because London’s share of the total UK economic output has reached an all time high of 21.9%. Furthermore there was an 11.5% increase in active businesses between 2007 and 2011 compared to just 1% across the rest of the UK. This is a sign of a growing economy within the capital, but a very stark difference to the rest of the country. However, it is possible that optimism across the whole of the UK could return soon. The Office for National Statistics this morning reporting that the country has narrowly avoided a dreaded triple dip recession and that the UK economy actually grew by 0.3% for the first three months of this year in spite of the appalling weather we have had. Whilst most politicians and reporters are relatively optimistic, the harsh reality of how this affects – or perhaps more correctly does not affect – the majority of UK citizens is apparent when you take a look at some of the comments posted on the BBC website. At 9.46 this morning for example Mike in Gateshead commented “Double dip. Treble dip. Have any of you people ever ventured north of the Watford Gap? Here in the north east we’re still in the first one.” The North-South divide is one thing, but it seems that London has become an independent little bubble.

Economic Microclimate

London's figurehead Boris Johnson

London certainly seems to be its own economic microclimate and many think it will continue on this path for many years to come – experts believe London will have the largest meaningful jump in GDP of any city in the world between now and 2025. It’s no wonder that many people around the world aspire to live and work in London. It is one of the only truly global cities and the diversity of its residents can only add to its attractiveness and success internationally. It also helps that we have a popular and memorable figurehead for London, in Boris Johnson. He wows the international press with the charm of a typical English eccentric and can reel off London trivia such as “London has more Michelin-starred restaurants than Paris” and that it rains more in Rome with ease. Both of these are actually true.


Worldwide Promotion

Recently Boris went on a trade mission to India to promote London and opened an office there solely to champion the city. And that’s not London’s only overseas office. We have six worldwide, including in China and the USA, there exclusively to promote tourism and business investment in London. London is the financial capital of the world according to the Global Financial Centres Index, with New York second and Hong Kong third. Despite the global financial crisis London has managed to maintain that top position and this years trading is looking positive with the FTSE closing at an all time high in March. While the EU seems to do everything it can to try and restrict the City, the government has so far largely managed to prevent these measures, with the notable exception of the bonus cap.

The Future

The Shard, tallest building in
Western Europe
Source: Telegraph

London needs to stay ahead of the game to keep its prime position. There are potential problems ahead that need to be addressed, and the cost of living is a good example. It is hard to speak to a Londoner without mention of the prohibitive house prices and rocketing rent costs. Without affordable living, London risks pricing itself out of the market for low skilled workers, a vital factor of the city’s economy. And with the population expected to grow to 9 million by 2020 it is clear we need to build more housing as well as a transport system that will be able to cope with this increase. Large projects such as Crossrail will take some of the strain but work should be done now to secure funding for Crossrail 2 as well as other transport projects. When it comes to housing, personally I am a supporter of skyscrapers - I’d rather London rose up than widened out. Buildings such as the Shard create a precedent for more tall buildings because once planning permission is given, it is much easier to build others nearby.

London’s dominance in the UK economy looks set to remain for the foreseeable future. It is the London mayor that provides the vision and leadership to move the city forward as well as promoting it to the rest of the world. If other cities in Britain want to follow in the footsteps of London perhaps they should consider mayors too. But during the mayoral referendums last year, Bristol was the only city that chose to create the position. The others may have missed out on a good opportunity to have a figurehead of their city.

Richard Sowler

Follow us on Twitter @AbchurchComms

Chávez: Venezuela's Voice

Chavez funeral casket: Source NDTV

On the 5th March Hugo Chávez, President of Venezuela, passed away after a 2 year battle with cancer. He was finally laid to rest over the weekend after a final memorial parade through Caracas.

The media-savvy President

No matter what you think of Chávez, I’m sure we can all agree that as a politician he was certainly unconventional. What other politician had a Sunday TV show that would start at 11am and only finish when he was done talking, which could take anywhere from four to eight hours. It was ‘real’ reality TV, with new policy announcements made off the cuff, insults towards western leaders and even once ordering a tank battalion to the boarder of Columbia during a time of tense relations between the two countries. All live on air, broadcasting to thousands of Venezuelans, many of whom saw it as compulsive weekend viewing. There were other oddities of Chavez. While undergoing chemotherapy treatment in Cuba he ran the government remotely using Twitter. This allowed him to stay in the news back home and his tweets regularly appeared on state television. Similarly, in 2011 when Venezuelans doubted the ability of the president to run in the 2012 election because of his fight with cancer, Chavez’s response was simple: star in an exercise video. “Healthy government, healthy body, healthy mind” were his exact words. I can’t even begin to imagine what would happen if David Cameron did any of these activities or the intense backlash there would be, but Chávez managed to get away with it and it cleverly showed him off as a man of the people.

Closer ‘ideological’ ties with China

You may be surprised to hear that the US is still Venezuela’s biggest trading partner, considering the soured relationship under the Chávez presidency. However this could change over the coming years as China’s economic and political influence grows throughout South America. Under Chávez, Venezuela ventured further afield from the US, its traditional trading partner, to China which it has become increasingly close to; they have even launched two satellites together. By 2010 they had signed 300 bilateral agreements including 80 major projects, including a contract to install 2000km of fibre optic cables and the construction of 1159km of railway infrastructure according to research by the University of Miami. For Chávez, the relationship was seen to be more ideologically significant than economically sound. These big projects were easily visible to the people of Venezuala and he could talk about how the Chinese were a growing international superpower that shared the same political views as himself. This resonated well with the people of Venezuela and aligned with his anti-west rhetoric.


The Future of Venezuela

Source: Guardian

There was no middle ground for opinions on Chávez – he was either a friend of the poor or a deranged dictator. The death of this autocratic leader leaves the future of the oil-rich nation in question. Currently Nicolas Maduro, Chávez’s hand picked successor, has been sworn in as the interim president. He has pledged loyalty to Chávez and the opposition has already accused him of using the funeral attended by hundreds of thousands to start his campaign for presidency. He is also carrying on the anti-American rhetoric of Chávez by making accusations that the US might have caused Chávez’s fatal cancer. Much of Venezuela’s future depends on who is elected on the 14th April. If Maduro wins the election, he has said his first foreign trip will be to China. The opposition also see increasing trade links with China as a good thing. While Maduro may not be as charismatic as Chávez, the very fact that he’s associated with him puts him in a favourable position. My bet is on Maduro winning the election and carrying on Chávez’s legacy. But probably not with the Sunday TV.

Richard Sowler

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Five minute Abchat with Simon Bonnett, Head of Wealth Management at Fiducia Wealth Management Limited

Simon Bonnett has over 25 years experience in Financial Planning; his career began at Norwich Union in the West End.

Simon is experienced in both Private Client and Employee Benefits planning and held several senior positions at Private Banks, Accountancy Firms and IFAs. At Fiducia, he specialises in Retirement Planning, Later Life Planning, Protection for the Family and Financial Planning.

What did you want to be when you grew up?
My father was into photography as a hobby and so I wanted to be a photographer; I was into portrait and sports photography.

How did you get into Wealth Management?
A school friend asked me to support him on a visit to the Job Centre in St. Pauls. I thought I should get interview experience so I picked up an advertisement (salary £3,427 ...); it was for an Administrator role with Norwich Union. I was offered the job following the interview, and haven’t looked back.

Describe your role in ten words or less (if that’s possible!):
Client-focused, business developer, jargon-translator, people educator, practice manager.

What is the most interesting thing about your work?
The people I meet and work with and for. You get to know them and share their passions with them.

How has the industry changed in the last couple of years?
It’s becoming even more professional; the RDR has focused advisors to adopt further professional practices and it’s raised the minimum standard from a qualification point of view. The profession has grown up, the attitude of people has changed, and thankfully it’s now about the client relationship rather than the sale of product.

We’re a profession and not an industry, and its all to the benefit of the client which is the most important point.

Is there a common misconception about Wealth Management?
People sometimes think it’s only about investing, whereas it’s about financial strategy including investments. It’s a holistic view. It’s a family office view; you look after your client’s welfare.

In which emerging market do you see the best potential in 2013?
Indonesia, Vietnam, or South Korea (naturally, take advice before investing ...)

If I wasn’t talking to you now, what would you be doing?
Developing relationships or tinkering to improve something.

Thank you Simon!

Follow Fiducia Wealth Management on Twitter @FiduciaWealth

The phrase that launched a thousand acronyms

As we mentioned in the Weekly Wrap up last Friday, Jim O’Neill, Chairman of Goldman Sachs Asset Management and coiner of the ubiquitous ‘BRIC’ acronym has announced that he will retire this year.

In 2001, Mr O’Neill’s paper ‘Building Better Global Economic BRICs’ outlined the huge growth potential of the emerging markets of Brazil, Russia, India and China and their rivalry to the West’s economic dominance.

“Jim’s BRIC thesis has challenged conventional thinking about emerging markets and, as a result, has had a significant economic and social impact.” Goldman Sach’s: Chief Executive: Lloyd Blankfein and President Gary Cohn.

It was an acronym that launched a thousand acronyms, with others including: the ‘CIVETS (Colombia, Indonesia, Vietnam, Egypt, Turkey, South Africa)’ and the less than complimentary ‘PIGS’ (Portugal, Italy, Greece and Spain).

Jim’s persistent interest in emerging markets is further evident in his final note this week to investors, “Are things that good?” In which he urged investors amongst other things to focus on the “quite cheap” markets of Turkey, Brazil, China, India, Indonesia, Korea and Russia.

Hailing from Gately in Manchester, Jim studied Geography and Economics at Sheffield University. He started his banking career with brief stints at Swiss Bank and Bank of America, before joining Goldman in 1995 as a Partner. His rise within Goldman Sachs mirrored that of the countries he championed. He was appointed head of global economics, commodities and strategy research in 2001becoming chief economist before being made Chairman of Goldman Sachs Asset Management in 2010, a role created specifically for him.

Jim is also known for his avid love of Manchester United football club and in 2010 he led a consortium of fellow supporters, the Red Knights, in a failed bid to take over the club.


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Building BRICS of the future

Competition in Emerging Markets

Unsurprisingly, we are seeing more and more consumer-orientated firms coming out of emerging markets that have huge brand power and global presence. For example, Mexico’s Grupo Bimbo, the world’s largest baking company, South Africa’s Aspen Pharmacare and Chinese e-commerce, Alibaba Group are advancing into foreign markets yet they remain largely unknown in the UK. It’s estimated that together the emerging market countries generate sales of over $1 billion.

The opportunities in emerging markets are immense: according to analysts’ forecasts China’s economy could surpass the US’ within just two decades. The Chinese economy is a hot topic in economic circles with analysts fiercely debating whether China is going to experience a crash or continue its unprecedented growth.

It was interesting to see in a recent survey from McKinsey that less than 20 per cent of decision makers are targeting China at city rather than country level¹. The report suggested that marketing strategies should focus on city-specific targeting in China and other emerging markets, due to the sheer scale of each city and growing consumer demand. This is certainly a strategy we have adopted as we work with increasing numbers of Chinese companies – there is much more value in targeting specific areas and understanding them well, than trying a blanket approach in such a vast geography.



Source: McKinsey & Company

Demand on commodities

There is little doubt that we are experiencing the biggest growth opportunity in the history of capitalism. In the past decade, worldwide consumption of coal, palm oil and iron ore has grown by up to 10% per year, and there has been a similarly substantial rise in the consumption of oil, copper and wheat.

According to Bernice Lee, Research Director of Energy, Environment and Resource Governance (EERG) of Chatham House, “demand from emerging economies has driven up commodity prices and made them more volatile”². This poses new challenges for risk management in public policy and business strategy between sectors, communities and nations. BRIC countries have started to put their foot on the break in fear of limited future supplies. For example, China has used export controls to support its industry’s raw materials, and Brazil and India are considering similar measures for iron ore².

In an attempt to resolve supply disruptions, the International Energy Agency’s (IEA) and its 28 member countries have agreed to store oil 90 days. In practice this should ensure that there is always a supply available. Last year, the IEA called on its members to release emergency oil stockpiles to balance market disruptions tied to the civil unrest in Libya.

Industrial and political disruptions were played out last year in front of the international community, when the Marikana massacre in South Africa and similar wildcat strikes spread across the country and left the sector in turmoil. Shares in companies such as Coal of Africa were hit hard and Anglo American Platinum has reported an annual loss.

This week companies and industry leaders gathered in Cape Town for the annual Investing in Africa Mining Indaba, the largest mining conference on the continent. In keeping with tradition, companies threw dinners and cocktail parties, and as usual, meetings were held by the Cullinan pool. Conversation centred on the state and business, the revival of the country and its mining firms, and how it can still benefit from China’s growth.

Shabnam

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¹Recent survey conducted by Mckinsey Global Institute

²Bernice Lee, Research Director of energy, environment and resource governance of Chatham House in Financial Times Guest post: let’s start an R30 Group to manage global resources.

Five minute Abchat with Janan Paskaran, Partner at Torys LLP, Canada

Janan Paskaran is a corporate and securities Partner at international business law firm Torys LLP in Calgary, Canada. He was a member of the judging panel for The Oil Council’s 2012 Lifetime Achievement Award in London.

What did you want to be when you grew up?

Like most kids in Canada, I wanted to be a hockey player!
(That's ice hockey to us Brits)

Describe your role in ten words or less (if that’s possible!):

Our aim is to provide practical legal advice and come up with creative solutions to ensure the goals of our clients are achieved.

What drew you to the natural resources sector?

I was born and raised in Alberta and so I grew up with the backdrop of the oil and gas industry. It is an unbelievably dynamic and interesting industry and I enjoy the variety of work I do on a daily basis.

What is the most interesting thing about your work?

Finding creative solutions is always the most interesting part of the job. With difficult capital markets, lateral thinking is key to ensuring our clients’ needs are met.

What is the main difference between advising companies in the UK and Canada?

There are some small nuances between the legal systems, however for the most part advising companies in both jurisdictions is fairly similar.

Is there a common misconception about the legal profession?

I think the biggest misconception is that lawyers are simply out to generate fees without regard to what clients actually want or need. Our Firm has always looked to establish a long term relationship with our clients so we are able to understand their business and become part of their team so we can work together to achieve their goals.

What developments do you expect to see in emerging markets in the next twelve months?

I think we will see continued investment in emerging markets as investors look for places where they can earn a significant return.

If I wasn’t talking to you now, what would you be doing?

Working or in the gym!

Thank you Janan!

Janan Paskaran has been involved in numerous transactions including Dana Petroleum in its C$240 million acquisition of Bow Valley Energy, Premier Oil in its US$505 million acquisition of Oilexco North Sea, General Electric in its US$4.8 billion acquisition of the aerospace business of Smiths Group and many more.

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Britain’s doors are only partly open to Chinese tourists

Chinese tourists are getting tangled in British visa red tape, so large numbers are heading to the Continent instead.

Britain is losing out on an estimated £1.2bn each year form a loss of Chinese tourist trade, as tourists are flocking to other European countries like France and Germany who have “easier” entry rules and requirements. In 2011 according to figures from the World Tourism Organisation around 1.1m Chinese visited France, 637,000 to Germany and only 149,000 to Britain. The spending power of Chinese tourists and the resulting impact on the UK economy is undisputed, especially when you consider that on Boxing Day alone they spent £1,310 per sale compared to £120 by the average British shopper. This would instantly benefit the British retail sector, as well as having knock-on benefits for the hospitality and transport industries.

Simon Walker, director-general of the Institute of Directors, said: “It is clearly a good thing for visitors to come to a country and spend their money. Products are sold, services are bought and jobs are created as a result.”

UK Visa Red Tape

Any Chinese National wanting to come to Britain has to first get their fingerprints taken, fill out a nine page document in English and pay £80 for a visa. This all has to be done in one of the 12 application centres across China. By contrast, the simpler “Schengen” visa allows access to 25 continental European Countries, with one short visa application and no fingerprints required and costs just £47, hence the discrepancy in the numbers.

Higher Education

Not only is the cumbersome visa process reducing the number of tourists to the UK, migration targets are damaging the reputation of one of our export strengths; Higher Education. Numerous chairmen of parliamentary committees have written to the Prime Minister urging him to remove overseas student numbers from migration targets. These students are not only providing short term economic benefit whilst they are studying, but they need to be viewed as our trading partners of the future. We as a country need to grow and cultivate our business links with the undeniable economic power house that is China.

Relaxing the Restrictions

The government has announced that as of April this year the visa application will be shortened and translated into Chinese. Is this sufficient? Visa policies are of course meant to protect our national security but they are also meant to encourage and facilitate legitimate trade and commerce across borders. The Telegraph Media Group is launching a campaign to urge the Government to relax the rules further. Along with the visa restrictions, limited aviation connections to many emerging cities in China are making it even harder for Chinese tourists, investors and students to come to the UK.

Simplifying the visa process is in the best interest of British trade, competitiveness and future growth. If we get this wrong we could very well lose the global race for Chinese commerce, investment, spending and talent.

Toby

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Zimbabwe strapped for cash or just another case of Contextomy?

How can a country’s Minister of Finance, even Zimbabwe’s, announce that they have only £138 left in their public accounts?

Zimbabwe’s money man, Tendai Biti has been reported saying that the country only had £138 left in its public account last week after paying its Civil Servants. However the following day some $30m of revenue has been paid in.

He later responded to BBC Africa’s Lewis Machipisa that his comment had been deliberately taken out of context and that “you journalists are mischievous and malicious.” The point he was trying to make apparently is that the government doesn’t have the funds to finance the rather suspect general election or the referendum on the constitution. He used the above reference in a metaphorical sense. Zimbabwe needs around £127m to pay for the democratic practices.

When you look at Zimbabwe’s economic track record, from the ‘bread basket’ of Africa, to hyperinflation, to today, such assessments of Zimbabwe’s finances in dire straits are not unimaginable. It was only four years ago in 2009 that the Reserve Bank of Zimbabwe introduced a Z$100 trillion note equivalent at the time to £20.

Mr Biti’s claim that his comment was taken out of context and manipulated by journalists is not an isolated complaint. It has been a running theme in complaints about journalistic practice everywhere. The practice of using a quote out of context is sometimes referred to as contextomy (the practice of misquoting someone by shortening the quotation or by leaving out surrounding words or sentences that would place the quotation in context).

However, even if his quote was taken out of context, we have to remember that there’s no smoke without fire.

Toby

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Five minute Abchat with Richard Gill, Editorial Director for T1ps.com

Richard Gill is the Editorial Director heading up the t1ps team. He started writing for the AIM & PLUS Newsletter in 2007 before becoming its editor, along with sister publication Small Cap Shares. His investment philosophy is focused on cheap growth companies, but with a focus on solid cash generative growth businesses offering a dividend yield. He holds the Chartered Financial Analyst (CFA) designation, and was named PLUS Markets Financial Writer of the Year in 2008. Richard is an Associate Member of the Chartered Institute for Securities and Investment, a member of the CFA Society of the UK and a regular member of the CFA Institute.

What did you want to be when you grew up?
Early on probably a footballer and in my teens a rock star. I haven’t given up on either yet! When I grow up a bit more I would like to be Chairman of Bradford City.

Describe your role in ten words or less (if that’s possible!):
Researching and advising private investors on which equities to buy.

What is the most interesting thing about your work?
Researching companies and meeting the directors and entrepreneurs behind them are a highlight. Having a one to one session with successful people like Nick Robertson of Asos can be truly inspirational. Industry lunches and parties can also throw out some interesting situations.

What three things do you look for when tipping a company?
There are literally hundreds of things to cover when looking for decent companies to recommend. But if I had to name three… I think in the current environment a company needs to have a strong enough financial position to fund its plans. Given the difficulty raising funds, private investors can often be the worst hit if firms have to raise money. Growth is also a key factor, if a company can’t grow its revenues and profits then the shares are not going to go up! Finally, the price has to be right. The best run company in the world won’t be recommended by us if the shares look over-valued.

Is there a common misconception about share tipsters?
Tipsters are often seen as the finance equivalent of dodgy second hand car sales men – and for some that is certainly true. However, at t1ps we are regulated by the Financial Services Authority and our analysts all have relevant finance qualifications including the IMC (Investment Management Certificate) and Chartered Financial Analyst (CFA) designation. Also, all our chief analysts are approved by the FSA. Because of this we think we are bringing credibility into the profession which others just don’t have.

What developments do you expect to see in the next twelve months?
Everyone has been expecting (or at least hoping) for a recovery in the small cap equity markets for at least five years now. But with no major recovery in the wider economy expected I think 2013 is going to be pretty much the same as 2012. IPOs will remain thin on the ground, fundraising will remain difficult for smaller firms and more brokers & advisory firms will either merge or go bust. The possibility of the government allowing AIM shares into a stocks & shares ISA might give the markets a small boost. I also expect Bradford City to make at least one visit to Wembley.

In which emerging market do you see the best potential in 2013?
Mexico is one emerging market which has been relatively over-looked by investors. The country has its political and drug issues and is not as “sexy” as the booming Chinese and Brazilian economies. However, the country has recently been benefiting from rising wages in China, with global manufacturers looking to take advantage of Mexico’s low labour costs. This has combined with high fuel costs causing trading partner the US to import more goods from Mexico, rather than from further afield.

If I wasn’t talking to you now, what would you be doing?
Looking for new investment ideas or organising a lunch.

Thank you Richard!

Follow Richard on Twitter @RichardLeoGill

Expect the Chinese economy to rebound in 2013

After a sharp economic slowdown through much of 2012, China’s economy is growing again.  Whilst the world’s second largest economy is not expected to return to double-digit growth, the predictions of economists are welcome news in a financial world assailed by the eurozone debt crisis and lacklustre recovery in the United States.

After seven consecutive quarters of slowing growth, China's GDP is forecast to rise by 8.0% in 2013, according to a group of economists recently surveyed by the Association for Financial Professionals. The figures would outpace the government's 7.5% growth target for 2012 but are well below the 9.3% recorded in 2011 and 10.4% in 2010. [1]

Sustaining growth is essential for China’s communist leaders, whose claim on authority largely comes from the country’s more liberal economic policies, which have helped lift hundreds of millions of people out of poverty over the past thirty years.

The rebound comes as China officially implements a once-in-a-decade leadership change in March 2013 when Xi Jinping, who was named the next Communist Party chief in November 2012, takes over as president and Li Keqiang becomes premier, in charge of day-to-day administration.  Xi, in his first public appearance after being selected to lead the Party, appeared to address the rich-poor divide, and said China’s citizens “want their children to have sound growth, have good jobs and lead a more enjoyable life. To meet their desire for a happy life is our mission.”

China’s startling economic transformation has long been fuelled by considerable state investment in infrastructure such as railways, airports, bridges and buildings, as well as an emphasis on manufacturing and exports.  But the country is now trying to recreate the past economic drivers of Western countries, promoting demand from within its own increasingly affluent consumers in order to grow the economy. In addition, the Communist Party claims it recognises the need to include the more unfortunate members of society who have not shared in the boom of the noughties as the class gap opens up.

Stronger monthly data during the fourth quarter, including industrial output and retail sales, has increased optimism that the worst is behind China, as did new single-month highs for imports and exports in December 2012. The economy however, still faces challenges such as overcapacity and reliance on investment-driven growth among other unresolved structural problems, and economists are being warned against over optimism, as stated by Yao Wei economist at Société Génerale in the China Post. [2]

China’s economy averaged GDP growth of 10% in the decade to 2010. A slower rate of 7.0% to 8.0% is seen by economists as part of China’s natural economic evolution as spending on projects such as transport and utility networks is reined in.

However, according to Mark Williams, Chief Asia Economist at Capital Economics “market optimism over China’s prospects risks being disappointed if in 2013 the recovery remains centred on infrastructure and real-estate investment rather than consumption.” [3]

A host of Chinese economic indicators, including the GDP, are set for release this week and the outlook remains optimistic amongst investors. Analysts widely forecast the data to be positive, underscoring the general speculation that the world's second largest economy is mostly out of the woods.

Henry

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[1] Recent survey conducted by Association for Financial Professionals www.afponline.org

[2] China Post http://www.chinapost.com.tw/business/asia-china/2013/01/14/367313/p2/China-economy.html

[3] Mark Williams, Chief Asia Economist at Capital Economics http://www.capitaleconomics.com/staff/global-economics/mark-williams.html

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Will the Indian tiger roar again in 2013?

“India is not simply emerging, India has already emerged” (Barack Obama)

India in 2012 offered everything a keen Bollywood fan could ask for. The year opened with drama and suspense as the economy (the third largest in Asia) was struggling and government inactivity was stifling the market. Then, the political villains arrived to make the situation worse, leading to the much published corruption scandals which further dented market confidence. But – as ever in Bollywood – there was a happy ending and 2012 closed with the government intervention that was desperately needed. This came in the form of reforms in the retail sector, with Q4 showing improved growth rates and lower inflation which together provides renewed optimism for the sequel: 2013.

Economists’ growth expectation for India in 2013 range between 6-6.5% and much depends on the Indian government’s ability to implement further reforms in land, labour and tax. These reforms will provide a more investment-friendly environment and help renew the confidence in the country to help increase inflow of foreign investment into India, which I think will be the key driver of growth in 2013.

The budgets to be announced in February will be the Congress government’s final budgets before the elections in 2014. These will be key indicators of the government’s willingness to target long term goals. The budgets will set out planned spending on infrastructure, employment initiatives, key requirement which should all be positive signs for investment into the economy. The recent elections in key states of Utter Pradesh, Gujarat and Punjab in which Congress results were poor, show a shifting of power in the long term and the emergence of minor parties being favoured by the Indian public. There remains a concern that these budgets may, in effect, be used as a way of sweetening the poor voters who make up the majority of the voting population and could delay the removal of subsidies and further reforms. This would win back public confidence at the expense of market confidence.

The Indian economy does need a more competitive framework within key sectors which are projected to grow rapidly over the next few years. The retail sector (expected to see a £160bn food industry by 2015), Life science and healthcare (expected to grow to £40bn within the next three years), and the telecom market (which currently has 811.6 million wireless subscribers) all offer exciting opportunities for further development and will provide knock-on opportunities for supporting sectors of the economy. India is already home to world-class companies such as Bharat Forge, Tata Group, Mahindra, Reliance Industries and Infosys but competition from multi-nationals could help Indian corporations to develop further within this vast market by ensuring a more equal competitive environment. The multi-nationals will have the resources and expertise to target the key cities but also tap into the significant smaller cities and the rural markets, opening them for Indian companies.

International trade accounted for 53% of India’s GDP in 2012 and the slowdown in the global economy over the last few years has certainly impacted the country. However, with improvements in the Chinese, US and European markets already, India’s trading activity will certainly increase in 2013. During February, planned visits from UK Prime Minister David Cameron and French President Francois Hollande, demonstrate major Western economies have clearly identified the strategic benefit of engaging with India. Further collaboration between India and key markets will only enhance its position in the world market.

2013 for India is highly dependent on the Congress government and Manmohan Singh in particular to provide a final push to ensure that his vision for India continues well beyond 2013. Singh started this journey for India in 1991 and it is predicted that this year will be probably be his last in power so it is hoped he will go out in style. India needs to avoid building bridges that go nowhere, and continue with reforms which will ensure that she continues on her journey to become one of the giants of the world economy. In Bollywood films the villain never wins and I think the increasingly-informed Indian public will no longer tolerate political inactivity, so expect plenty more song and dance numbers.

Trushar

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Frontier Markets are the new BRICs

“In essence, [frontier markets] represent what emerging market countries like Brazil, Russia, India and China were 20 years ago.” (Mark Mobius)

Pre-emerging markets are countries that have stock markets and form a subset of all Emerging Markets. They are often thought of as poor, under-developed countries but the reality is quite different. The less-established ‘Frontier Markets’ incorporate 25 countries across the globe, spanning Africa, the Gulf States, South America, Europe and Asia. These markets are typically pursued by investors seeking high, long term return and low correlations with more developed markets. As with the BRIC countries, these frontier markets are expected to continue to grow faster than the developed economies in 2013.

The 'African Lion'

Sub Saharan Africa economies are seeing rapid expansion with a growing entrepreneurial middle class, increasing political and economical stability, as well as a large resource base. While their growth and circumstances differ from so-called Asian Tiger economies of the past, taking into account the level of growth and resource wealth, perhaps these ‘African Lion’ economies will be another future success story. Nigeria, Kenya and Botswana are just a few of the African frontier markets to keep an eye on in 2013 and which should, to a degree, have a knock on affect on the rest of the continent. Botswana, for example, has relative control over its resources particularly its diamonds, while Nigeria and Kenya have an easier path to development due to their direct access to the sea and thus the ability to trade their resources without having to rely on a neighbour.

At the other end of the frontier market scale are the Gulf States. They are very wealthy due to their oil reserves but are still considered frontier markets because of heavy restrictions on foreign investments. If these are eased, the risks of investing in frontier markets like Saudi Arabia early could result in a large upside. As Allan Conway, Head of Emerging Market Equities at Schroders notes, countries like this will in fact, “leapfrog straight from a frontier market to a developed one.” Savvy investors will know that to benefit from the potential upside, they will certainly need to invest in the Gulf States before this leapfrogging occurs.

“The rapid advance of many frontier market countries toward emerging market status gives their investors economic opportunity for three main reasons: growth potential, valuations and correlation.”
(Mark Mobius)

Besides Gulf States, frontier markets also appear in other surprising areas, such as Europe. Croatia was outlined by Bloomberg as number 12 on its top 14 most exciting frontier markets of 2012. “Its stock market is cheap and inflation is low, however so is growth and more importantly their currency is highly volatile.” It is clear that there is no geographically binding factor compared with the Asian Tigers, but like the BRIC countries, perhaps the odds are in their favour now or in the not too distant future.

Risk vs. Reward

There are obvious reasons to be cautious about investing in frontier markets – by their very nature they are characterised by instability and poor liquidity. Pension funds for example, due to their risk adverse nature, would be understandably wary when it comes to investing in economically and politically fragile countries. However this has not stopped other investors recognising the opportunities for growth. Mark Mobius, Executive Chairman of Templeton Emerging Markets Group commented on his Emerging Markets blog post that “despite the psychology of risk aversion that has seized financial markets since the euro zone crisis erupted, money has been pouring not only into emerging equity markets but even into the newer and smaller frontier markets.” It is clear that for some, these risks are worth taking in order to benefit from the potential returns on offer.

Predictions are very hard to make, especially in the case of Africa when one must consider its hugely varied demographic withheld in colonial boundaries and its recent history particularly surrounding the reliance on aid and rise of dictators in a number of countries. However in my opinion, the risks – when carefully assessed – are worth taking in terms of the potential gains from investing in frontier markets, as was the case with investing in the BRIC economies a few decades ago. With countries like Qatar possibly to soon make the leap from frontier to developed market and the predicted growth of Sub Saharan Africa, frontier markets will attract significant investment. This will hopefully improve stability, further reducing risk. However in time the development of these markets may result in a decline in gains, so the prime time to act and invest may be with us sooner than we think.

Toby

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