BlackRock Frontiers mulls share issue as Nigeria drives boom

 
Michael Bow
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BLACKROCK Frontiers Investment Trust, which invests in fast growing frontier markets, yesterday said it was sounding out investors about a future rights issue to boost the size of the fund, as it posted solid half-year results.

The trust’s board, which appointed BlackRock to launch the vehicle in 2010, said it would make a decision about a future issue of shares in the next few weeks.

The board said the trust’s net asset value increased 22.4 per cent, in sterling terms, in the six months ending March, outperforming the MSCI Frontier Markets Index by 3.8 per cent.

The fund invests in a sub-sector of emerging markets known as frontier markets, which are fast growing but riskier economies.

Yesterday, it said the strong performance of its holdings in the Nigerian banking sector – which saw markets rise by 35 per cent – and the portfolio’s underweight position in Kuwait had helped drive the rise.

BlackRock’s head of emerging Europe equity team Sam Vecht, who manages the £130m fund, told City A.M.: “There haven’t been any big changes really but we did gradually reduce some of our middle east exposure in favour of south east Asia, where we didn’t have much exposure.”

The total market cap of all listed companies in frontier markets is around $1 trillion, but only about $20bn of assets globally are allocated to them. Dedicated assets following emerging markets are around $1 trillion.