The Frontiers of Country Risk
With global financial markets once again at all-time highs, investor appetite for risk has never been as encompassing (and worrying) as this. The spate of growing liquidity has prompted investors to look elsewhere for opportunities - even in places that many would hardly find attractive or promising.
This week marked the publicizing of the First Persian Equities Fund, a fund that gives foreign investors a run for their money in the Tehran Stock Exchange. With economic sanctions and a much-maligned nuclear programme completing the local scene, share prices there are trading at lower price-to-earnings. It could be a good opportunity, but it's definitely not for the weak of heart.
Elsewhere, Zimbabwe's Stock Exchange is booming, having grown 4,500% since December 2006. In real terms, returns are still favorable considering that inflation "only" reached 4,350%. The Zimbabwe dollar had recently plummeted to 300,000 to 1 US Dollar (from 100,000 earlier this week). Mugabe's antics certainly hasn't stopped the economically-deteriorating nation from joining the global bandwagon.
