Arab Spring

With the world's biggest central banks driving yields on safe assets to near zero, some investors are tossing caution to the wind and rushing to buy illiquid and previously overlooked bonds sold by countries with no capital markets track record.Even the biggest investors acknowledge that "frontier markets" like Vietnam and Romania aren't for the faint of heart because nobody knows whether these new debt market players will be able to make good on their obligations.Buying their bonds could prove painful just as it did with emerging markets during the Argentine economic crisis of 1999-2002, Asian financial crisis of 1997, and Russian financial crisis of 1998.As investors rush into frontier markets, analysts suggest careful selection among countries. Some fund managers even say not to bother with the sector, as its risks outweigh returns."The main risk when you buy a bond is the risk of default," said Nicolas Jaquier, emerging markets economist at Standard Life Investments, with $272.6 bi...

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