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Central Asia: Investing in the New Frontier

June 21, 2012 | Comments: 0 | Views: 113

Investing in emerging markets has been a popular business choice for years now, with a different part of the world being dubbed a veritable 'goldmine' for foreign investors year on year.

But how do you ensure that your investment is well placed? Of course, there are never any guarantees, but doing your homework and making decisions based on facts and statistics, as opposed to a hunch, is a very good start.

This type of informed investment decision is why Central Asia is such an attractive opportunity for the frontier investor. Experts are convinced that the untapped markets of this region are ripe for investment, but it's not just their opinions that are impressive - the statistics are too. Of all the emerging markets on the planet, Central Asia is a foreign investor's dream and everything written about the area, and the studies already undertaken, reiterate this notion.

Take the region's financial system, for example - this part of the world boasts some of this century's fastest-growing economies and combined with staggering reserves of natural resources, it's no wonder foreign investors are falling over themselves to get a piece of the action. There are three reasons why Central Asia's capital markets are perfect for investment.

· They're under developed

· They're under researched

· They're low cost

The area is underdeveloped when compared to other emerging markets, meaning investors can build a legacy in an area of relative infancy. Apart from the research quoted in this article, there has been very little digging done into the potential for investment in Central Asia. This means that in investment terms, it's one of the globe's best-kept secrets. Finally, the area still boasts inexpensive resources and therefore any investment project can be completed while being easy on your pocket.

When it comes to property, the mantra is 'location, location, location' and it could be said that investment is no different. The central part of Asia enjoys a strategic position between two phenomenally large economies in China and India. As these grow, so will the demand for Central Asia's natural resources - and with that follows unique investment opportunities. 1.2 billion people live in India, while China has a population of 1.3 billion. India is the fifth largest oil importer in the world, while China is the third and they boast $4.1 and $10.1 trillion GDPs respectively, meaning the area has two significant markets next door.

Central Asia is packed with countries that are perfect for foreign investors and the area represents a significant opportunity for those with the funds. Turkmenistan, for example, has discovered gas fields with the ability to supply the UK for at least 20 years, Kazakhstan boasts 99 of the Periodic Table's 110 elements in mined and mineable reserves, and Uzbekistan holds the fourth largest reserves of gold in the world.

Central Asia is an investment based on fact not fiction, statistics not sixth sense and potential not promises. With its significant natural resources, new markets and economic growth, now is the time to invest in this profitable region- can you really afford to miss this opportunity?

Paul Henderson is an experienced frontier markets investor and has previously lived and worked in Central Asia for several years. He is currently an Associate with Sturgeon Capital, the leading investment management specialist focused on Central Asian markets.

Source: EzineArticles
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