The Olympics and the Frontier Markets

Global recession? Sovereign debt woes? Eurozone debt crisis?

It was refreshing to see how this kind of news took a back seat while the more stimulating stories of Olympic excellence and achievement took the headlines for a couple of weeks.

London hosted no less than 10,000 athletes from 204 different countries. The games were a radiant success and leave us with many motivating afterthoughts.

Even though, in absolute terms, the winners table, in terms of total medals is still dominated by the USA, Great Britain, China and Russia, we saw a continuation of the trend in which athletes from developing nations increasingly find themselves on the winner’s podium.

The more athletes you send, the higher the chances of picking up medals. That makes intuitive sense. But have a look at the table next to these lines. See how the many of the top 20 medals achievers/ number of athletes are actually from the frontier markets. The merit lies in the high conversion ratios for what are typically small teams of athletes.

With many emerging markets enjoying their day in the sun, they are increasingly able to fund Olympic training programs that produce more champions.

How times change. Less than 2 Olympic Games ago, only very few would even consider investing in Brazil, the next Olympic host and first South American country to host the event.

Tokyo, Istanbul and Baku are all in the running for the 2020 Olympics, so another emerging market host is likely. If one is picked, they will be able to build global recognition and influence, and attract investments to boost their rapidly growing economies.

It certainly didn’t go unnoticed how the 3 winners of the marathon, the Game’s quintessential discipline, proudly represented 2 East African countries, Kenya and Uganda for the whole world to see!

Looking further into the future, Kenya is now getting ready to put in a bid to host the the 2024 Olympics. Developments like this are testament to the willingness of East Africa’s leading economy to play a leading role in the global village.

Sports and financial markets may not be entirely related but all this just goes to show that the frontier markets paradigm now runs through all areas of our reality.