Frontier markets rose 0.2% (MSCI Frontier Markets xGCC Net EUR) during the past month. If it wasn’t for index heavyweight Nigeria, the performance would have been even better and in Vietnam and Pakistan local equity indices traded at eight year high and all-time-high respectively in local currency terms.

• Nigeria continued to wrestle with deteriorating economy and during July the Central Bank of Nigeria (CBN) took control over one of the smaller banks in the country. During the second part of the month, the currency depreciated and CBN raised the policy rate. In our view the currency has now reached more realistic levels which mean the Nigerian stock market is approaching investable territory again.

• Vietnam removed Foreign Ownership Limits for Vinamilk, the country’s largest listed company, during July. It is a positive step in the deregulation of the country’s stock market and should result in increased interest from foreign investors. It should also mean that Vietnam’s weight in frontier indices can double in the next twelve months as Vinamilk alone should get a 3-5% weight.

• Pakistan continued to enjoy MSCI’s decision to upgrade the country to emerging market status. Tundra Pakistan Fund rose +4.3% (EUR) during July.

Click for the full Pakistan or Frontier Opportunities update.