Emerging markets and ETF index trading is today’s hottest topic in trading market. Many trading companies like Black Rock Inc.’s iShares, Vangaurd Inc., Standard and Poor’s SPDR index, Nasdaq 100’s QQQQ etc. has been tracking and trading different stock baskets ranging from the index trade based on market capitalization or specific market sector. However, with outsourcing and more companies emerging in developing nations, traders like wise index trackers have been looking into emerging markets and selling ETF index in sprcific market sector of these emerging markets.
These emerging markets are mainly Russia, China, India, Brazil and so on. These basically are the countries we’ve been hearing about in the news. Traders trading ETFs from these emerging markets have been getting maximum profit. Now my concern is, if we’ve traded in “known” emerging markets why don’t we try trading in “hidden” emerging markets.
So what exactly is “hidden” emerging markets? These markets are the countries who rarely appear in the news as an “Emerging Market.” Moreover, most westerners don’t even know if these countries exist. So what’s good investing in those obscure area. Well countries like Nepal, Bhutan, Bangladesh (this might not exactly be hidden emerging market), Latvia, Lithuania, Uruguay, Cambodia, Laos, Burma etc. where rules and regulation are quite loose and corruption is prevalent, its easier to steer the market in the direction you want to either by bribing the bureaucrats or insider trading.
So what about legal issues? Since rules and regulation in these areas are pretty lenient and we’re trading far away from SEC’s eyes we; can pile up all the wealth we get our hands upon and shift our investment to different country. Well this might not be a feasible idea for long term investment goal but in my opinion will be suitable for hedge fund business.
Likewise, the market capitalization of these area is pretty small and the trading is not as hardcore as in Wall Street, its pretty easy to predict what’s going on once you get hang of it. As they tend to follow similar trend which is easier to follow than those numerous corporation in Wall Street exchanges. This second investment strategy will be beneficial for long term investment or those firms that track and trade ETF index fund in Emerging Markets.
In my next post I’ll try generating qualitative and quantitative analysis of those hidden markets in and around Indian sub-continent.