Half-year Report
07/06/2024 07:00
Barings Emerging EMEA Opportunities PLC
Half Year Report
for the six months ended 31 March 2024
The Directors present the Half-Year Financial Report of the Company for the
period to 31 March 2024.
Barings Emerging EMEA Opportunities PLC (LSE: BEMO) is pleased to declare an
interim dividend in respect of the financial period ending 31 March 2024 of 6
pence per Ordinary Share, payable on 26 July 2024 to ordinary shareholders on
the register as at 21 June 2024. The ex-dividend date will be 20 June 2024 and
the DRIP election date will be 21 June 2024. Further information on the
Company’s dividend can be found in the Chairman’s Statement set out below.
Financial Highlights
for the six-month period to 31 March 2024
KEY PERFORMANCE INDICATORS
NAV total return 1# Share price total return 1# Dividend per Ordinary Share 1#
13.2% 12.8% 6.0p
(31 March 2023: -2.1%) (31 March 2023: -5.0%) (31 March 2023: 6.0p)
31 March 2024 31 March 2023 30 September 2023
NAV per Ordinary Share 1 682.1p 607.8p 617.6p
Share price 532.5p 509.0p 483.0p
Share price total return 1,*,# 12.8% -5.0% -8.8%
Discount to NAV per Ordinary Share 1 21.9% 16.3% 21.8%
Benchmark 1,* 5.8% -5.5% -3.4%
Dividend yield 1,2,3 3.2% 3.3% 3.5%
Ongoing charges 1 1.8% 1.6% 1.6%
RETURN PER ORDINARY SHARE
31 March 2024 31 March 2023 30 September 2023
Revenue Capital Total Revenue Capital Total Revenue Capital Total
Return per Ordinary Share 5.54p 69.89p 75.43p 6.71p (20.78)p (14.07)p 14.59p (13.16)p 1.43p
Revenue return (earnings) per Ordinary Share is based on the revenue return of
£653,000 (31 March 2023: £805,000; and the full year to 30 September 2023:
£1,726,000). Capital return per Ordinary Share for the half year is based on
net capital gain of £8,245,000 (31 March 2023: net capital loss of
£2,492,000; and full year to 30 September 2023: net capital loss of
£1,557,000). These calculations are based on the weighted average of
11,796,902 (31 March 2023: 11,991,821; and 30 September 2023: 11,829,676)
Ordinary Shares in issue during the period/year.
As at 31 March 2024, there were 11,796,902 Ordinary Shares of 10 pence each in
issue (31 March 2023: 11,807,563; and 30 September 2023: 11,796,902) which
excludes 3,318,207 Ordinary Shares held in treasury (31 March 2023: 3,318,207;
and 30 September 2023: 3,318,207 shares held in treasury). The shares held in
treasury are treated as not being in issue when calculating the weighted
average of Ordinary Shares in issue during the period/year. Since the period
end and up to 31 May 2024, the Company has bought back nil shares for
cancellation.
1 Alternative Performance Measures (“APMs”) definitions can be found in
the Glossary as set out in the full report.
2 The yield as of 31 March 2024 is comprised of the 2023 final dividend of
11 pence per share and the interim dividend for the six months to 31 March
2024 of 6 pence per share, based on the share price as at 31 March 2024.
3 The yield as of 31 March 2023 is comprised of the 2022 final dividend of 11
pence per share and the interim dividend for the six months to 31 March 2023
of 6 pence per share, based on the share price as at 31 March 2023.
* Movement to 31 March relates to the preceding six months and movement to
30 September relates to the preceding twelve months.
# Key Performance Indicator.
Chairman’s Statement
Performance
After the turmoil of the past two years, it is a pleasure to be able to report
positive results for the six months to 31 March 2024, both in absolute terms
and relative to the benchmark. The EMEA equity markets (“EM EMEA”) in
which BEMO invests registered a gain of 5.8% over the period, following
markets globally, which were led higher in anticipation of a peak in interest
rates combined with continued economic growth.
Against this backdrop, we are pleased to report a significant gain in the
Company’s Net Asset Value (“NAV”), which registered a total return of
13.2%, outperforming the benchmark, and broader emerging markets.
The Board are encouraged that performance continues to improve post the
write-down of Russian assets, with the portfolio ahead of the benchmark over
six months, one year and two years. Regrettably, performance over three and
five years continues to be impacted by the negative relative performance in
the 2022 financial year, with the Company lagging the benchmark across both
periods. However, the returns remained ahead of the benchmark over seven and
ten years.
Investment Portfolio
The strong performance within the portfolio serves to highlight the
distinctive opportunities which the universe of EM EMEA has to offer.
Emerging Europe continued to reflect the continent’s improving economic
prospects against an environment of falling energy prices and growing
disposable income. Poland and Greece returned 38% and 16.3% respectively,
lifting returns in BEMO’s European region to 5.8%. The Company’s holdings
in Emerging Europe were the strongest drivers of both absolute and relative
returns, reflecting the importance of our holdings in the financial sector
that serves as a good proxy for our markets and offers exposure to growing
consumer demand.
Turkey offered a tale of two halves over the period. During the fourth quarter
of 2023, the market declined before rapidly rebounding in 2024 as market
participants’ risk perceptions eased with the country’s return to orthodox
economic policies. This is a view shared by the Investment Manager and, as a
result, the portfolio delivered a positive absolute return in a market which
registered a small absolute decline.
The performance of markets in the Middle East was more mixed. The region’s
largest market, Saudi Arabia, outperformed the broader region, with BEMO’s
portfolio benefitting from its investments in companies that are actively
contributing to the diversification of the Saudi economy away from
hydrocarbons. In contrast, Qatar and the UAE posted negative returns,
reflecting the lower levels of market liquidity and depth of available
investment opportunities.
Whilst absolute returns in South Africa lagged broader EM EMEA returns, the
Investment Manager‘s stock selections generated relative outperformance in
this market. This result was achieved by avoiding companies vulnerable to the
ongoing disruption to energy supply locally, and focusing investments in
quality companies better equipped to navigate the uncertain environment.
Russian assets in the portfolio continue to be valued at zero whilst extensive
sanctions and restrictions on the sale of securities remain in place. The
Board, however, remains focused on how shareholder value can be best
preserved, created and realised in relation to the holdings of Russian assets.
A welcome development over the period was the ability of the Investment
Manager to take advantage of opportunities to exit three companies, namely
Magnit, X5 and TCS, thereby releasing approximately £2.3m of value back into
the Company. While these are positive developments, the Board will continue to
value the remaining assets at zero until circumstances permit otherwise.
Consequently, there is no exposure to Russia in the Company’s NAV, and
management fees are not being charged on these assets.
Discount Management
The discount at 31 March 2024 was 21.9% and the average discount during the
period was 21.8%. This compares with a discount of 16.3% at the 31 March 2023.
The Board remains focused on discount management, with the aim of containing
the discount. However, whilst share buybacks continue to be an option
available to the Company to help manage the discount, they are significantly
less effective during periods of elevated market volatility, as has been the
case recently. As a result, the Company has not bought back any shares during
this financial period.
Gearing
There were no borrowings during the period. At 31 March 2024, there was net
cash of £1.9 million (30 September 2023: £3.9 million). The Company does not
currently use a loan facility but keeps its gearing policy under review.
Interim Dividend
In the first half of the financial year, the portfolio generated an income
return of 5.5 pence per Ordinary Share, compared with 6.7 pence for the same
period last year. The Directors are proposing an interim dividend of 6 pence
per share, which maintains the dividend at the same level as last year by
utilising revenue reserves.
Based on dividends paid over the prior 12 months and the share price as at 31
March 2024, the Company’s shares yielded 3.2%. The Board believes that this
remains an attractive yield. The Investment Manager continues to believe the
income potential of the portfolio will grow over the medium term and that this
growth will be sustainable. The Board retains the flexibility to pay out up to
1% per annum of NAV from capital as income to Shareholders.
Outlook
Looking ahead, global equity markets are likely to continue to be driven by
news flows surrounding the potential decline of inflation and a loosening of
monetary policy by US and western central banks. Although the oil price
rebound in recent months may limit central banks' scope to reduce interest
rates, equity markets should continue to benefit from broadly robust and
uninterrupted growth, allaying widespread concern that monetary policy
designed to bring down inflation might also lead to stagnation or even
recession.
While the global outlook remains uncertain, we are beginning to see an
increasingly constructive view within emerging markets, as the monetary policy
tightening cycle turns ahead of developed markets. Meanwhile the absolute
valuation of EM equities, and the relative valuation versus developed
equities, appears attractive, suggesting investor expectations for the asset
class remain overly depressed. This creates the potential for increasing
interest in the asset class in general and EMEA markets in particular.
In this connection, we already see an improving economic picture across a
number of countries in the portfolio. Within Emerging Europe, financials
continue to represent a significant portion of the portfolio, and the
Investment Manager is positive on the prospects for the sector. In addition,
Emerging Europe is also buoyed by strong growth in real household income,
which has reached its highest level relative to developed Europe. Against this
backdrop, the Investment Manager sees opportunities in residential real estate
and broadening discretionary consumption as consumers benefit from this
stronger buying power.
Turning to the Middle East, economies continue to benefit from low inflation,
healthy consumption growth and high capital investment. A particularly strong
performer as regards investment is Saudi Arabia, which is channelling the
revenue derived from its oil sector back into other areas of its economy,
spurring domestic demand and increasing the relative contribution of non-oil
sectors to the economy’s overall performance. On this basis, the Investment
Manager continues to identify exciting opportunities for medium term growth
across a number of sectors.
South Africa, by contrast, has continued to face more challenging economic
conditions with the problems of the country’s electricity supply persisting
amid a rising political risk in the run-up to the imminent national elections.
While remaining on the alert for positive opportunities post-elections, the
Investment Manager continues to remain selective, focusing on companies with
business models and high quality management that mitigate risks posed by
economic uncertainties.
Director appointment
The Board was delighted to welcome Alastair Bruce as a Non-Executive Director
of the Company and Chair of the Audit Committee on 1 February 2024. Alastair
has substantial Board experience of investment trusts and is already proving
to be a valuable member of the Board.
Promotional activity and keeping shareholders informed
The Board and Investment Manager have in place an ongoing communications
programme that seeks to maintain the Company’s profile and its investment
remit, particularly amongst retail investors. Over the review period we have
continued to distribute our monthly BEMO News which is emailed to engaged
supporters, including many hundreds of the Company’s shareholders. These
emails provide relevant news and views plus performance updates and links to
topical content. If you have not already done so, I encourage you to sign up
for these targeted communications by visiting the Company’s web page at
www.bemoplc.com and clicking on ‘Register for email updates’.
Frances Daley
Chairman
6 June 2024
Report of the Investment Manager
Our strategy seeks to diversify your portfolio by harnessing the long-term
growth and income potential of Emerging EMEA. The portfolio is managed by our
team of experienced investment professionals, with a repeatable process that
also integrates Environmental, Social and Governance (“ESG”) criteria.
Our strategy
Access Experienced investment team helps to foster strong relationships with the companies in which we invest. First-hand Expertise The investment team conducts hundreds of company meetings per year, building long term relationships and insight. Process Extensive primary research and proprietary fundamental analysis, evaluating companies over a 5-year research horizon ESG Integration Fully integrated dynamic ESG assessment combined with active engagement to positively influence ESG practices.
with macro considerations incorporated through our Cost of Equity approach.
A detailed description of the investment process, particularly the ESG
approach can be found on pages 18 to 19 of the Annual Report and Accounts for
the year ended 30 September 2023.
Market Summary (All numbers quoted in GBP)
Over the period EMEA equities were stronger, along with most equity markets
globally. Markets rose in anticipation that the US Federal Reserve would cut
interest rates in 2024, earlier than previously expected. A combination of
falling inflation and weaker economic data reinforced the belief that
policymakers had passed the peak of the tightening cycle, prompting a rally in
risk assets, notably in the latter stages of Q4 2023. Against this backdrop,
the Company’s NAV increased by 13.2%, significantly outperforming the MSCI
EM EMEA benchmark which rose by 5.8%.
Emerging Europe
Markets within Emerging Europe were some of the best performers over the
period, continuing the trend of outperformance during 2023. Poland returned
38.0%, as equity markets responded positively to Donald Tusk’s Civic
Platform-led government, with its more constructive approach towards both
internal and external affairs. Elsewhere in the region, Greece returned 16.3%,
supported by news that its sovereign risk rating had been upgraded to
investment grade status. The Turkey story was mixed. The market’s negative
return of -2.9% reflected the Lira’s weakness, but there was an upturn in Q1
2024 amid improved risk perceptions on the back of the country’s return to
orthodox economic policies. This gave support to the Lira, and boosted the
performance of the banking sector.
South Africa
South African equities ended the period largely flat, returning 1.4%,
reflecting the ongoing electricity supply crisis which plagued the economy in
2023. We are, however, seeing tentative signs of improvements, allowing for a
more constructive outlook for domestic consumption to rebound and support the
economy.
Middle East
The performance of markets in the Middle East was mixed. The region’s
largest market, Saudi Arabia, returned 10.1%, whilst Qatar and the UAE posted
negative returns of -2.5% and -6.1% respectively. Egypt was the weakest market
in the region, down -16.8%, reflecting a devaluation in the currency that was
required as part of a deal with the International Monetary Fund (“IMF”).
The region’s major markets are strongly influenced by the oil price, which
drifted lower in Q4 2023 in response to concerns of a slowing global economy
before rebounding, as such concerns eased, despite fears of wider conflicts in
the Middle East which have the potential to disrupt oil supply.
EMEA Market Performance (in GBP, based on MSCI indices)
Currency Returns (local currency returns vs. GBP)
Country Returns Currency Returns
Poland 38.0% Poland 5.9%
Greece 16.3% Greece -1.4%
Hungary 13.5% Hungary -2.5%
Saudi Arabia 10.1% Saudi Arabia -3.4%
Kuwait 4.4% Kuwait -2.9%
South Africa 1.4% South Africa -3.4%
Qatar -2.5% Qatar -3.4%
Turkey -2.9% Turkey -18.1%
U.A.E -6.1% U.A.E -3.3%
Czechia -6.8% Czechia -4.9%
Egypt -16.8% Egypt -37.0%
Source: Barings, Factset, MSCI, March
2024 Source: Barings,
Factset, MSCI, March 2024
Eastern European markets were some of the strongest performers in absolute
terms, whilst markets such as Turkey and Egypt were impacted by depreciation.
Income
The Company’s key objective is to deliver capital growth from a carefully
selected portfolio of emerging EMEA companies. However, we are also focused on
generating an attractive level of income for investors from the companies in
the portfolio.
Whilst dividend inflows to the portfolio remain below historical averages, due
to the exclusion of Russia from the investment universe, rising pay-out
ratios, and an encouraging economic environment, most notably in the Middle
East and Emerging Europe, should contribute positively to revenue growth for
the portfolio over the medium term. Importantly, we believe that revenue
growth will be sustainable.
Macro Themes
In line with our bottom-up approach, our primary focus is to identify
attractive investment opportunities at the company level for our Shareholders.
Nevertheless, we remain vigilant and mindful of broader macro effects within
the region. This in turn helps to support the contribution to performance from
our company selection, accessing long-term growth opportunities, while
reducing the effects of declines in performance from major macro dislocations.
Middle East: Rising Tensions
The ongoing violence in the Middle East is an obvious risk factor. Tensions
remain high which has increased volatility in the price of crude oil and is a
clear barometer of risk sentiment. The impact of the continuing violence and
elevated tensions in the Middle East since October 2023 has had a relatively
limited impact on the region’s markets, in part owing to the effect of the
conflict in supporting the oil price. We remain extremely selective in our
investment approach putting greater focus on companies’ medium-term earnings
profile, and how markets currently value that prospective earnings growth.
Despite the difficulty in forecasting the magnitude and duration of the
current hostilities, our outlook for the region continues to be supported by a
healthy level of domestic investments in support of companies that keep pace
with the development of economic and social reform agendas.
Turkey: Economic Renewal
One of the standout performers of Q1 2024 was Istanbul’s stock market,
boosted by Turkey’s efforts to anchor inflation expectations and build trust
among market participants. A significant increase in international investment
inflows followed confirmation from the new governor of the Central Bank of
Turkey of his commitment to taming inflation, by increasing benchmark interest
rates by 5% to 50%. This bold move was seen as a sign that clearer and more
consistent economic policies are set to continue, and by doing so laid the
foundations for greater trust from the international investment community.
This was noticeable in the outperformance of the economically sensitive
banking sector, which delivered a substantial return in response to Turkey’s
declining risk premium.
Following the period end, Turkey’s nationwide municipal elections resulted
in a resounding opposition gain against President Erdoğan’s AKP party, with
voters focusing on inflation as a critical issue. We believe this result is a
positive development for the market, with voters sending a clear message to
Erdoğan that the key focus should be to support Turkey’s finance team, led
by Mehmet Simsek, to continue the path of orthodox economic policies and
Central Bank independence. Accordingly, we consider the Istanbul stock
market’s combination of deep liquidity, attractive valuations and a
substantial number of high-quality management teams as unique. We remain
overweight Turkish equities relative to the portfolio’s comparator benchmark
with a focus on domestically exposed sectors such as financials and retailers.
The benefits of bottom-up stock selection continued to pay dividends in Turkey
as our top selection picks, which were concentrated in domestic retailer, BIM
and an industrial conglomerate, KOC, helped deliver a positive absolute return
in a market which declined.
South Africa: Elections
2023 saw South Africa contend with significant “Load Shedding”. This
refers to strategic blackouts, where households and businesses are left
without power for between six to twelve hours a day to ease pressure on the
grid, thus allowing electricity to be provided for critical services. The
impact of this program has been significant, acting as an economic drag,
particularly for industries where re-scheduling operations is unfeasible –
such as retailers and telecommunications services. Lower footfall in shops and
loss of service on phone networks has reduced profit margins.
The problems have, however, begun to show signs of easing and served to focus
attention on the failings of the ruling African National Congress (ANC) party,
which has been governing South Africa uninterrupted since 1994. Interestingly,
this comes at a crucial time given the parliamentary elections took place on
29 May, as a result of which the ANC lost its majority for the first time in
recent history. Whatever the ultimate outcome of the election in light of
ongoing coalition deliberations, the weakened support could force the ANC into
conducting the much-needed reforms required to stimulate essential increases
in capital investments. We continue to be selective in our equity holdings
within South Africa and remain focused on well managed companies which can
capitalise on the improving macro picture.
Central Europe: Household income growth
With inflationary effects abating over the course of 2023, Central European
real household income growth started to gather momentum, driven by a powerful
mix of foreign direct investment, tight labour markets, productivity gains and
a strong export sector. This has left the region’s household income growth
rates at an unparalleled level in a European context. Against this backdrop,
we see discretionary consumption and residential real estate as key areas
which stand to benefit from the resurgent buying power of Central European
consumers.
Greece: Manufacturing Renaissance
Whilst historically Greece has been associated with its pleasant beaches,
impressive landscapes and ancient culture, under the radar Greece is quietly
undergoing a manufacturing renaissance which has added to its already
impressive position as a tourist destination. This is best exemplified by
Greece’s Manufacturing Industrial Production Index reaching a 15-year high,
and a significant rise in job creation and GDP growth.
Russia
While the Company has taken the decision to value its Russian assets to zero
following the invasion of Ukraine in 2022, it remains focused on how
shareholder value can best be preserved, created, and realised in relation to
the holdings of Russian assets. Given the nature of enforced regulatory
restrictions, our approach has been to look at each security in isolation and
ensure any potential action taken complies with all necessary sanctions.
Following this analysis, opportunities have arisen over the period to exit
three companies, namely Magnit, X5 and TCS. We welcome this positive
development and continue to remain vigilant for any future opportunities.
Portfolio Country Weight Portfolio Sector Weight
Saudi Arabia 31% Financials 48%
South Africa 26% Materials 15%
U.A.E. 10% Communication Services 10%
Qatar 6% Consumer Discretionary 11%
Poland 8% Real Estate 4%
Hungary 4% Industrials 5%
Turkey 4% Consumer Staples 3%
Kuwait 5% Energy 3%
Greece 4% Information Technology 1%
Czechia 2%
Source: Barings, Factset, MSCI, March
2024 Source: Barings,
Factset, MSCI, March 2024
Company Selection
Our team regularly engages with management teams and analyses industry
competitors to gain an insight into a company’s business model and
sustainable competitive advantages. Based on this analysis, we seek to take
advantage of these perceived inefficiencies through our in-depth fundamental
research, which includes an integrated Environmental, Social and Governance
(ESG) assessment, and active engagement, to identify and unlock mispriced
growth opportunities for
our Shareholders.
Stock selection significantly improved the portfolio’s relative return over
the period, whilst sector asset allocation had a small negative impact.
The contribution from financials was the largest contributor from a sector
perspective and was supported from a number of different regions within EM
EMEA. We are pleased to report that our top five investments in this sector
contributed 75% of the portfolio’s outperformance relative to the comparator
benchmark over the last six months. This reflects our focus on stock selection
from a broad universe of 57 financial companies.
In Emerging Europe, PKO Bank Polski, Poland’s largest bank, was the standout
performer, as the bank benefited from the improving political landscape
following the results of the country’s general election. In Greece, the
financial sector benefited from an improving economic picture as tourist
levels continued to grow and the country’s debt rating was upgraded to
investment grade by all major rating agencies. In South Africa, Capitec also
outperformed, benefiting from its strong brand loyalty to cross-sell insurance
and investment products to its customers whilst increasing its digital
presence through its on-line app. Lastly, in the Middle East, Tadawul and Al
Rajhi rallied in response to perceptions that inflation has peaked, opening
the way to US Fed interest rate cuts. This would support the earnings of both
companies with lower funding costs, against a backdrop of higher investor
activity within Saudi Arabia.
Our underweight position in resources, materials and energy, also contributed
positively, as a number of unowned companies across the region saw a
deteriorating earnings outlook. In South Africa, chemicals and energy company
Sasol declined in response to ongoing operational issues and a persistent
downturn in chemicals pricing, which continued unabated. Aramco, our largest
underweight within energy, was also weak, as Saudi Arabia chose to shoulder
the largest portion of the OPEC+ supply cuts, lowering the national
champion’s production volumes.
Despite reducing our underweight in health care, the sector had a negative
impact on relative performance following the strong performance of a small
number of benchmark holdings. To date, we have invested in the Saudi private
hospital operator Dr Sulaiman Al-Habib Medical Services Group Co., which we
believe over time will be supported by the ongoing regulation and reforms
enacted by the Saudi government, and the company’s track record of
generating shareholder value. In the UAE, real estate developer Aldar
underperformed as investors questioned the company’s capital allocation
strategy in light of its investment in several assets outside of the UAE.
In light of the strong market rally, the portfolio’s small allocation to
cash ended the period as the largest detractor to relative performance.
Engagement Case Study
Impala Platinum
We regularly engage with companies with the aim of improving corporate
behaviour or enhancing disclosure levels.
Overview: We engaged with Impala Platinum, a South African mining company, to understand its response to an elevator accident which led to fatalities in one of its mine shafts.
Objective: Our aim was to understand the safety response of Impala Platinum, including the immediate impact on families, the breadth of its investigations and plans for improvement.
Outcome: Following reports of the accident, we contacted the company to request they answer a range of questions. The company was prompt to respond, confirming that the impacted shaft remains closed, subject to required repairs and securing approval from the regulator to re-open. In addition, the remaining shafts were all proactively stopped by the company and subsequently re-opened with full support from the regulator.
A formal investigation by the regulator followed by an inquiry into the incident/findings has commenced (normal time to conclusion 6-24 months). This will be accompanied by multiple independent and coordinated investigations – a formal investigation and inquiry process overseen by the regulator – internal and independent expert investigations commissioned by the company and overseen by the board.
Based on this response, we believe the company has evidenced a robust response, and we have encouraged the company to make this information public and will continue to monitor for improvement
Outlook
The diversity of the three dominant regions within Emerging Europe, Middle
East and Africa continues to provide a unique opportunity set that has a low
correlation to other EM regions. In addition there is support from favourable
macro dynamics, such as reforms, wage growth in real terms, and capital flows.
Whilst the political landscape in the Middle East remains uncertain, we retain
conviction that the favourable economic backdrop of low inflation, growing
labour participation, and substantial capital investment, should support the
long-term positive outlook for the region. Given the richer valuations on
offer, we remain selective, focusing on areas of the market where we believe
there remains support from structural growth opportunities, and remaining
disciplined when determining the value of our investments. As Middle Eastern
markets remain underrepresented within investor portfolios, interest in the
region’s economic and structural tailwinds should help increase demand for
the region’s equity markets.
Within emerging Europe, the full potential of Turkey’s pivot to an orthodox
monetary policy has yet to be realised and is unlikely to be fully discounted
by market participants for several years. The benefits of the economic reforms
will certainly not be linear, and the risk of a U-turn by President Erdoğan
will likely be tested as Turkey’s economy begins to slow, digesting the
central bank’s deposit rate, which stands at 50%. Longer term however,
Turkey’s unique geographical location which straddles both the Middle East
and Europe, combined with favourable demographics and high productivity growth
rates, could propel Turkey onto the radar of the wider investment community.
South Africa has faced its fair share of economic and structural challenges.
However, we believe we are at, or near to a trough. Whilst the economic
recovery will be gradual, we hope that the government that emerges from the
recent elections will have the political capacity to enact a much-needed
reform agenda. We continue to be extremely selective in our positioning within
domestically focused SA companies, with our largest remaining exposure being
the regional bank Capitec.
Baring Asset Management Limited
Investment Manager
6 June 2024
Detailed Information
Barings Emerging EMEA Opportunities PLC's Half Year Report for the period
ended 31 March 2024 is available
at https://www.barings.com/en-gb/investment-trust/the-trust/financial-statements
It has also been submitted in full unedited text to the Financial Conduct
Authority's National Storage Mechanism and is available for inspection at
data.fca.org.uk/#/nsm/nationalstoragemechanism in accordance with DTR
6.3.5(1A) of the Financial Conduct Authority's Disclosure Guidance and
Transparency Rules.
For any enquiries please contact:
Quill PR +44 (0)20 7466 5050
Nick Croysdill, Sarah Gibbons-Cook
About Barings Emerging EMEA Opportunities PLC
"Finding quality companies from Emerging Europe, the Middle East and Africa."
Barings Emerging EMEA Opportunities PLC (the "Company") is a UK based
investment trust that was launched on 18 December 2002 and is managed by
Baring Fund Managers Limited.
In November 2020, the Company broadened its investment policy to focus on
growth and income from quality companies in the Emerging Europe, Middle East
and Africa ("EMEA") region. It also changed its name from Baring Emerging
Europe PLC to Barings Emerging EMEA Opportunities PLC at the same time.
For more information, and to sign up for regular updates, please visit the
Company’s website: www.bemoplc.com
LEI: 213800HLE2UOSVAP2Y69
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