Fed takes a backseat in frontier financial markets

Investors’ attention over the past month has been primarily focussed on the Federal Reserve and the expected number of interest rate hikes in the US this year, but other factors have arguably had a greater influence on frontier financial markets. The recent dip in oil prices has hit equity markets in the major energy producers and even prompted some speculation that the authorities in Saudi Arabia may be forced to devalue the riyal. We think these fears are wide of the mark. Elsewhere, Croatia’s stock market has fallen sharply amid concerns that one of the country’s largest companies, Agrokor, is on the brink of collapse. While the firm is not listed, its failure could have a significant knock-on effect on the broader economy, which has yet to fully recover from the 2009 global financial crisis.