So far 2017 has been a tranquil year for the American stock and bond markets. Investors and institutions with exotic tastes can look to foreign markets for more risk and the hope of higher returns. In particular, Iran, Russia, Poland, and China are currently the most popular of risky foreign markets.
Since the Iran deal that lifted sanctions two years ago, global institutions have tried to make progress in investing in Iran's markets. Although US firms are still technically prohibited from investing in Iran, European and Chinese companies especially have made forays into Iran's oil and natural gas industries. The French energy company Total
Recently Russia and Poland have been a hot topic for investors. Barron's announced that Poland is the best stock market of 2017, having been up almost 19 percent year-to-date. Polish dividend yields are also at a healthy 2.12% in a major ETF for US investors
Chinese equities are also in a comeback uptrend. After an unremarkable 2016 in which the Shanghai Composite (SHA: 000001) lost 12.3%, the index has bounced back to gain 4.6% year-to-date. International investors and institutions have piggybacked onto the trend. Nasdaq is cautiously optimistic on China, due to bullish sentiment from Beijing's plans to build the Xiongan economic zone that promises rapid growth. A state news report announced that brokerages recorded a 153% month-on-month increase in profits of $1.59 billion in March, signaling rising momentum and trading activity. Finally, Bloomberg argues that investors should look to Shanghai for rising yields and sustainable income.
Iran, Poland, Russia, and China are making headlines and attracting the attention of investors and institutions. Although it takes a bigger risk appetite to invest in such markets, many are reallocating to profit from popularity.
The author does not hold any positions in any of the securities above.
