U.S. Federal Reserve Board (Fed) to promote the second round of the quantitative easing policy, announced earlier this month will increase by 6,000 billion in bonds purchased. Today, the larger emerging economies, a new wave of hot money is on the flood of combat readiness.
Since the Fed started in 2009 since the first round of quantitative easing, shrinking yields prompted investors to the United States have turned to other markets with higher returns.
But including sub-Saharan Africa's frontier markets, including not derive much benefit. The rapid growth of the "BRIC" is an entirely different story, the influx of foreign capital to local bond market, leading to the establishment of Brazil, the capital control measures to prevent the appreciation of the currency stifle exports.
Morgan Stanley Capital International (MSCI) BRIC index has been since March 2009 rose by nearly 150%, now at a record high. MSCI emerging market index while similar gains, currently at the high point of June 2008.
But in comparison, MSCI Frontier Markets Index over the same period rose just 65%.
Institute of International Finance estimated in 2010, global capital flows to emerging markets reached 8,250 billion U.S. dollars, up 8,330 million in 2011, far exceeding the 5,940 billion in 2008.
But for Africa and the Middle East (which also includes the economically more developed South Africa and other emerging markets), the agency forecast in 2010 and 2011 inflows were only 86 billion and 850 billion U.S. dollars, lower than the 88 billion in 2008.
Forefront of the market not only face capital inflow slowed down, more cautious investors, problems, and the negative impact of inflation may also feel more for the deep.
Cairo private equity firm Citadel Capital Chairman Ahmed Heikal said: "I think the second generation of quantitative easing major negative impact."
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