REG-Barings Emerging EMEA Opportunities Plc: Annual Financial Report
05/12/2025 07:02
Barings Emerging EMEA Opportunities PLC
LEI: 213800HLE2UOSVAP2Y69
Annual Report & Audited Financial Statements for the year ended 30 September
2025
The Directors present the Annual Financial Report of Barings Emerging EMEA
Opportunities PLC (the “Company”) for the year ended 30 September 2025.
The full Annual Report and Accounts for the year ended 30 September 2025 can
be accessed via the Company’s website at
www.bemoplc.com .
NON-STATUTORY ACCOUNTS
The financial information set out below does not constitute the Company’s
statutory accounts for the year ended 30 September 2025 but is derived from
those accounts. Statutory accounts for the year ended 30 September 2025 will
be delivered to the Registrar of Companies in due course. The Auditors have
reported on those accounts; their report was (i) unqualified, (ii) did not
include a reference to any matters to which the Auditors drew attention by way
of emphasis without qualifying their report and (iii) did not contain a
statement under Section 498 (2) or (3) of the Companies Act 2006. The text of
the Auditors’ Report can be found in the Company’s full Annual Report and
Accounts on the Company’s website at www.bemoplc.com.
FINANCIAL HIGHLIGHTS
for the year ended 30 September 2025
Annualised NAV total return 1,# Share price total return 1,# Dividend per Ordinary Share #
28.3% (2024: 17.3%) 47.6% (2024: 18.5%) 19.5p (2024: 18.5p)
For the year ended 30 September 2025 2024 % change
NAV per Ordinary Share 1 884.0p 706.4p 25.1%
Share price 795.0p 555.0p 43.2 %
Share price total return ,1,# 47.6% 18.5%
Benchmark (annualised) 1 21.2% 8.5%
Discount to NAV per Ordinary Share 1 10.1% 21.4%
Dividend yield 1,2 2.5% 3.3%
Ongoing charges 1 1.6% 1.7%
Year ended 30 September 2025 Year ended 30 September 2024
Revenue Capital Total Revenue Capital Total
Return per Ordinary Share 17.88p 177.42p 195.30p 18.97p 86.71p 105.68p
Revenue return (earnings) per Ordinary Share is based on the revenue return
for the year of £2,106,000 (2024: £2,238,000). Capital return per Ordinary
Share is based on net capital gain for the financial year of £20,904,000
(2024: gain £10,229,000). These calculations are based on the weighted
average of 11,782,462 (2024: 11,796,902) Ordinary Shares in issue, excluding
treasury shares, during the year.
At 30 September 2025, there were 11,722,041 (2024: 11,796,902) Ordinary Shares
of 10 pence each in issue which excludes 3,318,207 (2024: 3,318,207) Ordinary
Shares held in treasury. The shares held in treasury are not included when
calculating the weighted average of Ordinary Shares in issue during the year.
1 Alternative Performance Measures (“APMs”); definitions can be found in
the 2025 Annual Report and Accounts.
2 % based on dividend declared for the full financial year and share price at
the end of each financial year.
# Key Performance Indicator.
* The benchmark is the MSCI EM EMEA Net Index. Prior to 16 November 2020, it
was the MSCI EM Europe 10/40 Net Index.
FIVE YEAR FINANCIAL RECORD
At 30 September 2025 2024 2023 2022 2021
Shareholders’ funds £104m £83m £73m £75m £111m
NAV per Ordinary Share 884.0p 706.4p 617.6p 632.1p 920.7p
Share price 795.0p 555.0p 483.0p 548.0p 793.0p
Dividend per Ordinary Share 19.5p 18.5p 17.0p 17.0p 26.0p
ROLLING ANNUALISED PERFORMANCE (%) 3 years 5 years
NAV Total Return 14.8% 7.7%
Share Price Total Return 17.0% 9.6%
Benchmark Total Return 8.3% 6.2%
Source: Barings, Refinitiv, Bloomberg, MSCI.
FINANCIAL YEAR PERFORMANCE (%) 2021 2022 2023 2024 2025
NAV Total Return 36.6 -29.9 0.5 17.3 28.3
Share Price Total Return 39.7 -29.1 -8.8 18.8 47.6
Benchmark Total Return 33.3 -20.1 -3.4 8.5 21.3
Source: Barings, Refinitiv, Bloomberg, MSCI.
CHAIRMAN’S STATEMENT
In what will be my last Chairman’s Statement before I step down at the next
AGM, I am delighted to report that the Company delivered an all-time record
high level of capital growth in the last financial year. Continuing last
year’s strong performance, the Company’s NAV total return was 28.3% (net
of costs), outperforming the benchmark significantly by 5.8%. This strong
performance in both absolute and relative terms serves to highlight the
benefit of diversification that EM EMEA offers, when compared to more
conventional investment mandates, and demonstrates Barings’ expertise in
asset allocation and stock picking.
This return was even more pronounced when compared to a range of international
benchmarks, with the Company significantly outperforming both developed and
emerging markets indices.
The outstanding result in the latest financial year extends a multi-year run
of outperformance, as a result of which the Company is now is now firmly above
the benchmark over one, three, five and ten year periods. This achievement
confirms the Board’s belief that the Company offers a distinctive and
attractive investment proposition, which provides exposure to high-growth
economies in a region underrepresented in investment portfolios. Highlighting
how our strong results have been achieved against the backdrop of macro
uncertainties that loom ever larger, the Investment Manager attributes this
success to the unparalleled opportunities offered by the EM EMEA region, which
boasts a higher concentration of locally dominant business models, and a
breadth of stock picking opportunities for the benefit of our shareholders.
Investment Portfolio
The recent resurgence in global market volatility, driven by trade tariffs and
policy uncertainty, has favoured EMEA emerging markets owing to their
comparatively low economic dependence on exports to the US and limited
exposure to commodity price volatility. This has positioned the region as a
relatively defensive investment destination.
Central and Eastern European markets in particular delivered significant
returns supported by hopes of peace in Ukraine. Germany’s infrastructure
programme, having injected fervour into European markets, has also served to
benefit its Eastern European neighbours. Greece specifically stood out,
delivering approximately 70% returns in GBP terms, with its financial sector
benefiting from a marked rebound in credit growth, which continues to
accelerate.
In the Middle East, performance was more varied. The United Arab Emirates
outperformed, led by the financial sector, which benefited from more stable
macroeconomic conditions compared to its regional peers and an improving
economic growth outlook. Conversely, the weakened oil price environment
continued to weigh on the region’s largest market, Saudi Arabia, whose
fiscal position depends heavily on revenues from its oil and gas industry.
This has led to larger budget deficits and reduced government spending.
South Africa’s equity gains were primarily driven by the mining sector, as
gold and precious metals experienced significant rallies amid ongoing
geopolitical tensions, trade uncertainty, and a weakening U.S. dollar. Turkey
was the sole market not to deliver an absolute return, as increased political
risk, following the arrest of Istanbul’s mayor, undermined investor
confidence, weakened the lira, and prompted bond investors to question the
country’s investment rationale.
Russian Assets
Russian assets in the portfolio continue to be valued at zero while extensive
sanctions and restrictions on the sale of securities remains in place.
However, the Board remains focused on how shareholder value can best be
preserved, created and realised in relation to these holdings. A welcome
development this financial year has been the realisation of £1m from the sale
of Nebius N.V. (formally Yandex N.V.), following realisations of three other
Russian holdings during the prior year. Although these are positive
developments, the Board will continue to value the remaining assets at zero
until circumstances permit otherwise.
The Board is actively exploring ways in conjunction with the Investment
Manager to divest these assets while ensuring compliance with global
sanctions.
Discount
The discount as of 30 September 2025 was 10.1% and the average discount during
the period was 15%. This compares positively with a discount of 21.4% as at 30
September 2024.
The Company does not have in place a formal discount control mechanism;
instead, the Board effects share buybacks opportunistically where it considers
this is in the interests of shareholders and would enhance Shareholder value.
Following Russia’s invasion of Ukraine and the subsequent sanctions, the
Company’s shares traded at a wider discount relative to NAV. Against this
backdrop, the Board did not consider buybacks an effective way of delivering
value to shareholders. However, noting the steady improvement of the
performance of the Company and the relative value of the shares, the Board now
believes that buybacks, going forward, may provide a more effective tool in
seeking to maintain a narrower discount, on average, than occurred over the
last five years.
During the financial year, 74,861 Ordinary Shares were bought back at an
average price of £7.14 per Ordinary Share, at a cost of £535,000. All
Ordinary Shares repurchased during the year have been or are being cancelled.
Gearing
There were no borrowings during the period. As of 30 September 2025, there was
net cash of £1.3 million (30 September 2024: £3.8 million).
While the Company does not currently use a loan facility, the Manager intends
to reintroduce gearing into the portfolio through index futures. Exposure to
index futures will complement the core investment strategy of generating
long-term alpha through stock-picking, by enhancing total returns based on the
Manager’s views on likely broader movements of the markets within EM EMEA.
Dividend
In the financial year under review, the income account generated a return of
17.88 pence per Ordinary Share, compared with 18.97 pence over the same period
last year.
Noting the recent strong performance of the Company’s portfolio, the Board
has committed to a new progressive dividend policy. This policy is to pay an
increased dividend each financial year and is expected to be paid from a
combination of both income and capital. The Directors consider that the new
dividend policy will be beneficial in increasing value returned to existing
shareholders.
On this basis, the Directors are proposing an increased final dividend of 13.5
pence per share, (2024: 12.5 pence per share). In respect of the six months
ended 30 March 2025, the Company paid an interim dividend of 6 pence per share
(2024: 6 pence per share). Based on dividends for the financial year and the
share price as of the end of the financial year, the Company’s shares
yielded 2.5%.
Subject to shareholder approval at the AGM, it will be paid on 6 February 2026
to shareholders on the register at the close of business on 19 December 2025.
The Ordinary Shares will be marked ex-dividend on 18 December 2025.
General Meeting
The Company held a General Meeting on 21 October 2025 for Shareholders to
approve the Continuation of the Company. While the resolution passed, it
received less than 80% support. Accordingly, in line with Provision 4 of the
AIC Corporate Governance Code 2024, the Board will report within the next six
months on the actions it has taken to further engage with shareholders.
As a result of the Resolution being passed, the Board is implementing a
revised tender offer trigger mechanism, a more active use of share buybacks
and an improved dividend policy. In addition, the Investment Manager intends
to make greater use of the capacity afforded within the Company’s investment
policy, to increase the concentration of the portfolio to up to around 35
holdings. To coincide with this approach, the Investment Manager also intends
to reintroduce gearing into the portfolio through the use of index futures, as
mentioned above. Further information can be found in the Report of the
Investment Manager.
Outlook
Whilst we have long championed the benefits of the Company’s investable
universe, performance in recent years has demonstrated them in practice. Amid
rising geopolitical risks, investment flows are likely to be increasingly
drawn to regions that are able to deliver growth through a domestically
oriented economy, rather than relying on global trade, flows or purely
thematic drivers. As we regularly emphasise, the EM EMEA region offers not
only unrecognised growth potential and unique company selection opportunities,
but also attractive levels of income, solidifying its place as a strong
diversifier for investors.
Among several notable developments this year, Emerging Europe has seen
significant positive trends. One of these is rising hopes of the war in
Ukraine coming to an end. This, when combined with the potential for a
reinvigorated Europe following Germany’s major fiscal expansion, creates a
fertile environment for emerging European countries, such as Poland. These
developments point to increasing industrial investment in Europe in a lower
risk environment.
As regards South Africa, last year’s focus on political change opening new
avenues for its economy has shifted more recently to the country’s rich
natural resource endowments. Gold has been one of the best performing assets
globally, outperforming most major stock markets in the process. Despite this
spectacular performance having a number of drivers, both short term and
structural, the Investment Manager believes that this rally risks
overshooting. The benefit of the surging gold price for South Africa, owing to
its investible opportunities in gold mining, could therefore be vulnerable to
a correction in the gold market. The focus is therefore likely to revert to
political developments as the key to the country’s future direction.
Given the diversity of the EM EMEA region, the drivers of the portfolio are
likely to vary markedly from year to year. This natural diversification has
been a key driver of the Company’s consistently strong returns in recent
years. Lower oil prices during the past year have supported economies that are
net energy importers, as in EM Europe, while Saudi Arabia and other Middle
Eastern energy exporters have faced a more challenging environment. Even as
lower oil prices have slowed the pace of investment and reform, the region’s
equity markets continue to deepen following a number of initial public
offerings. Such market deepening diversifies equity indices and attracts
capital to the region.
Promotional Activity
The Board and Investment Manager have an ongoing communications programme,
designed to maintain the public face of the Company’s profile and its
investment remit, particularly among the retail investor audience.
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, views,
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“.
Directors & Succession Planning
It has been a privilege to be Chairman of BEMO and, as well as congratulating
Barings on the performance of the portfolio in recent years, I should like to
pay tribute to the wisdom of my colleagues on the Board, both current
Directors and those who have now stepped down. I shall miss them greatly but
look forward to following the progress of the Company from the sidelines.
I am pleased to be able to inform you that Vivien Gould, who has been on the
Board since 2019, has agreed to take over as Chairman of BEMO. Her extensive
financial services experience and the assiduous approach she takes to her
work, most notably as mastermind of our promotional activity, are hugely
valuable. I know I am leaving the Company in good hands. Vivien will become
Chairman of the Company following the conclusion of the next Annual General
Meeting.
Annual General Meeting (“AGM”)
The AGM will be held on Thursday, 22 January 2026 at 10.00 a.m. at the offices
of Barings, 20 Old Bailey, London EC4M 7BF. A presentation from our Investment
Manager will be given at the AGM, and attendees will also be able to ask
questions in person and meet the Directors. Details of the formal business of
the meeting are set out in the Notice of Meeting, included within the 2025
Annual Report and Accounts .
The Directors consider that all the resolutions to be proposed at the AGM are
in the best interests of the Company and its shareholders as a whole.
The Directors unanimously recommend that shareholders vote in favour of all
the resolutions, as they intend to do so in respect of their own beneficial
holdings in the shares of the Company.
Frances Daley
Chairman
4 December 2025
REPORT OF THE INVESTMENT MANAGER
Market Summary
Emerging European, Middle East and African (EMEA) equity markets advanced over
the period, with the MSCI EM EMEA index increasing 21.3% in GBP terms and
outperforming broader developed and emerging markets. Against this, the
portfolio outperformed significantly, with the Company’s NAV increasing
28.3% (net of fees) in GBP terms, providing a positive relative return of
5.8%.
Regionally, markets in Central and Eastern Europe were some of the best
performers across EMEA, with the Czech Republic, Poland, Greece and Hungary
returning between 30-70% in GBP terms. Greece rallied significantly, driven by
strong corporate earnings and renewed foreign investor interest, especially in
the financial sector. Banks such as Alpha and Piraeus posted outsized gains,
driven by rising interest rates, improved asset quality and a rebound in
credit growth. Hungary also delivered impressive returns, supported by easing
inflation and a recovery in industrial production. Stabilisation of the forint
and signs of improved relations with the European Union helped restore
investor confidence.
The Middle East saw more diversity in returns. The UAE outperformed, led by
financials, which benefited from elevated interest rates, robust loan growth
and improved asset quality. Stable macroeconomic conditions, including
contained inflation, upwardly revised GDP growth projections and sustained
foreign direct investment, further supported investor sentiment. In contrast,
Saudi Arabia lagged, impacted by falling oil prices and concerns over a
slowdown in Vision 2030 giga-project spending, geopolitical uncertainty and a
broader rotation out of energy heavy markets.
In South Africa, the mining sector was a key driver of equity gains, as gold
and precious metals rallied sharply amid persistent geopolitical tensions,
trade uncertainty, and a weakening U.S. dollar. Naspers also attracted renewed
investor interest after Tencent rallied along with the Chinese tech sector,
driven by AI momentum and attractive multiples.
Turkey was the only market that did not deliver an absolute return over the
period. Despite the central bank’s return to orthodox monetary policy,
political risk increased following the arrest of Istanbul Mayor Ekrem
İmamoğlu, widely seen as President Erdoğan’s main rival. This has made
Turkey less attractive to bond investors and weakened the Turkish Lira.
EMEA Market Performance & Currency Returns – 1 October 2024 to 30 September
2025 1
Market Market Return Currency Currency Return
Greece 67.8% Euro 4.8%
Czech Republic 60.8% Czech Koruna 8.7%
Hungary 47.2% Hungarian Forint 6.7%
South Africa 36.4% South African Rand -0.5%
Poland 34.3% Polish Złoty 5.3%
UAE 30.7% United Arab Emirates Dirham -0.5%
Kuwait 25.3% Kuwaiti Dinar -0.5%
Egypt 24.8% Egyptian Pound 0.4%
Qatar 9.0% Qatari Riyal -0.5%
Saudi Arabia 0.8% Saudi Riyal -0.5%
Turkey -2.3% Turkish Lira -18.2%
1 Market Return in GBP, based on MSCI indices,
Currency Returns vs. GBP
Source: Barings, Refinitiv, Bloomberg, MSCI. 30 September 2025
Income
While the Company’s key objective is to deliver capital growth from a
carefully selected portfolio of emerging EMEA companies, we are also focused
on generating an attractive level of income for investors from the companies
in the portfolio.
Looking ahead, as we increase portfolio conviction and concentration to up to
35 holdings, we anticipate there is likely to be a higher degree of
variability of income from year-to-year. This will result from a focus on our
highest conviction ideas, some of which may favour growth over income, or
income over growth.
We believe attractive and growing levels of income can continue to be
generated from investment in EM EMEA, as the portfolio benefits from rising
pay-out ratios and efficiency gains. In periods where income levels may fall,
the Board remains committed to the implementation of a progressive dividend
policy, which will enhance cash returns to shareholders by utilizing returns
generated by capital.
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 vigilance helps support the contribution to performance from
our Company selection, accessing long-term growth opportunities while reducing
the negative effects on performance from major macro dislocations.
EM EMEA: Safe Harbour
In our Half Year Report, we noted the resurgence in volatility following the
introduction of trade tariffs by the Trump Administration, aimed at
traditional allies and economic rivals alike. Given the unconstrained nature
of this shift and erratic nature of its implementation, the impacts of policy
uncertainty have been felt globally. This has resulted in reduced investment
and weakening growth which, in-turn, increases the spectre of recession.
While recession has so far remained at bay, investors have begun to digest
these developments, most notably in
varying returns of global equity markets, commodities and currencies. This
environment has favoured EM EMEA, which benefits from limited direct exposure
to U.S. goods exports and a concentration of locally dominant business models
on its stock exchanges. At the same time, increasing uncertainty has
increased the value of commodities such as gold, an area in which EM
EMEA is rich in deposits and investible opportunities. These factors position
the region to be more defensive, due to its lower sensitivity to the current
trade uncertainty.
Return of the Bond Vigilantes: Spot the Emerging Market
Government debt levels globally are now approaching levels not seen since
post-World War II, a phenomenon that has stemmed in part from the increased
spending during the COVID-19 pandemic and the effects of the war in Ukraine.
Simultaneously, fiscal deficits have expanded as successive governments have
remained reluctant to impose tax increases, even despite dramatically rising
interest rates. At the same time European governments are looking to increase
spending on defence, stretching finances even more.
These levels of debt, can pose risks to the global economy through financial
instability if not managed properly. As the year has progressed, we have seen
these concerns increasingly materialise. The resulting pressures and
constraints have contributed to political instability in countries such as
France, Japan, and the U.K. leading to changes of Prime Ministers, and notable
policy reversals and uncertainty. Meanwhile, the U.S. has endured its longest
federal government shutdown in history due to political tensions over raising
the debt ceiling. We expect these issues to continue posing elevated risks to
equity markets.
The current situation stands in stark contrast to the past when comparing the
developed and emerging economies.
Historically, emerging economies have been associated with both high inflation
and debt due to a combination of factors, including increased public borrowing
for development and vulnerability to global financial conditions. Today,
however, this picture is meaningfully different. Many emerging markets,
particularly within EM EMEA, now exhibit lower inflation, lower levels of
governmental debt and healthy growth outlooks.
From our perspective, this increases the diversification benefits and relative
value of investing within our region and should reduce the equity premium in
these markets. Unsurprisingly, given the region’s solid economic
fundamentals and compelling investment opportunities, we have seen a return of
capital to exchanges and healthy IPO markets. These trends should support
valuations and close the gap between our companies and their developed market
peers.
Central Europe: War to remain on the Continent
Among the numerous developments across the region this year, there was a real
hope for a ceasefire in Ukraine.
Whilst a resolution to the conflict has yet to materialise, markets have
reacted to the rise in support for peace talks, affording central Europe a
significant re-rating. This has led to a strong performance in Poland, Hungary
and Czech Republic, surging to 35-50% in GBP terms. Interestingly, while peace
talks have faltered to date, returns have not followed in similar fashion,
implying that markets view this to be a permanent step in the right direction.
Central Europe: What does German re-industrialisation mean for its neighbours?
Following the recent German elections, Chancellor Friedrich Merz and his
coalition partners have implemented a fiscal package centred on a new €500
billion infrastructure fund. These changes represent a significant shift aimed
at addressing underinvestment within its economy, with the goal of boosting
economic growth and modernizing the country. However, this may have wider
impacts, serving to kick start Europe’s economic potential. Given their
proximity, Eastern European neighbours may stand to benefit.
Re-industrialization from infrastructure to defence, will require reshoring
activity back to the E.U. This will involve cement, steel, copper, and
importantly people, an area where Eastern Europe boasts a young, determined
and educated workforce.
Middle East: Living in a world of lower oil prices
In recent years, oil prices have declined from their post-war highs, as supply
disruptions have waned and projections anticipate oversupply heading into
2026. This shift has benefitted some energy-importing nations and those
grappling with the lingering impacts of inflation. Conversely, oil and
gas-oriented economies have seen their fiscal positions weakened markedly.
Within our investible region, the Middle East stands out in this context.
We have long championed the Middle East’s potential as it works structurally
to diversify its economies away from oil and gas. Recent years have
underscored the importance of this transformation. As oil and gas revenues
have moderated, the pace of capital investment and reform has been adjusted
downwards, whilst international investors have looked elsewhere for returns,
removing capital from local equity markets. This shift has made company
fundamentals a bigger determinant of share price performance, to the benefit
of the Company. Intuitively, economies that have prioritised diversifying away
from oil and gas have fared significantly better than those that haven’t.
The
UAE stands out this context, boasting economic growth driven by a large
workforce, a significant consumer market, and the influx of skilled talent and
investment.
South Africa: Gold rush continues
Earlier in the year, we remarked on gold’s impressive run, as it soared in
price to $3,400/oz. During the reporting period, gold continued its stellar
performance, breaking the $3,850/oz threshold to reach an all-time high. When
looking at places to invest in gold, South Africa stands out as having the
world’s largest known gold reserves, primarily
concentrated in the Witwatersrand Basin, with its South Deep mine holding the
largest remaining gold reserves on earth. The portfolio has benefited
significantly from this trend, with positions in Gold Fields and AngloGold
delivering returns of over 170% in GBP over the year.
Structurally, this upward movement has been fuelled by the world’s central
banks, which have increased their ownership preferences as they seek to reduce
their overreliance on the U.S. dollar. Buying has been most enthusiastic in
China and India, gathering pace following Russia’s invasion of Ukraine and
the subsequent weaponisation of the dollar by the U.S. While central bank
purchases have begun to plateau, speculators have returned pushing prices
higher. This could lead to a period of consolidation as prices move away from
their fundamental value. Despite the uplift in gold prices, we continue to
hold exposure to these companies and remain vigilant for attractive entry
points to build positions further.
Company Selection
Our team regularly engages with management teams and analyses industry
competitors to gain insight into business models 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 was the primary driver of the portfolio’s relative
outperformance during the financial year, while sector allocation contributed
modestly to returns.
The materials sector in South Africa was the strongest source of alpha, as
investors favoured gold and precious metals amid ongoing geopolitical
tensions, trade uncertainty and a weakening U.S. dollar. Our overweight
positions in Goldfields, AngloGold Ashanti, and Valterra Platinum were key
contributors. Polish miner KGHM also added to relative returns, benefiting
from rising copper and silver prices.
Financials delivered notable gains, particularly through stock selection in
Emerging Europe. Whilst the Company has the ability to invest in all sectors,
a significant proportion of the investment universe is concentrated within
financials, representing more than 45% of the Company’s benchmark with banks
representing a significant proportion of this. As domestic consumption and
investment continue to grow in our region, credit-to-GDP ratios are expected
to rise, fuelling greater demand for mortgages, consumer credit, and business
loans. This leaves banks in this region deeply connected to the strength of
their local economies and set to benefit from ongoing economic development.
From a stock selection perspective, Greek banks Alpha and Piraeus stood out,
supported by attractive valuations, high-quality assets, and a favourable
macroeconomic backdrop. Investor sentiment was buoyed by proactive steps to
address the fiscal implications of Deferred Tax Credits, capitalised tax
shields, reinforcing confidence in the sector’s earnings potential. Alpha
Bank received an additional uplift following UniCredit’s decision to
increase its stake.
Hungary posted strong returns, aided by easing inflation and a rebound in
industrial production. Stabilisation of the forint and signs of improved E.U.
relations helped restore investor confidence. OTP Bank reached an all-time
high, having strategically divested underperforming subsidiaries and
prioritised capital returns over expansion, funding growth entirely through
internal resources. Czech bank Komercni was another standout, where strong
profit growth, resilient asset quality and the rollout of a new digital bank,
combined with a compelling valuation, drove share
price appreciation.
In Poland, insurance firm PZU contributed positively, with investors
responding favourably to the interim CEO’s strategic focus on corporate
governance, dividend policy, and long-term value creation. The Company’s
plan to restructure into a listed financial conglomerate, spanning insurance,
health, banking (PKO), and asset management, was well received. PKO Bank also
delivered strong results, with sequential improvement in net interest margins
and growing expectations for accelerated lending. The portfolio’s largest
single-stock detractor was Polish parcel operator Inpost, which declined after
downgrading domestic volume growth and amid uncertainty surrounding its
Allegro partnership.
In the UAE, Abu Dhabi Commercial Bank added to returns, supported by robust
results and ambitious medium-term targets. However, our participation in the
IPO supermarket operator Lulu detracted from performance. Weak results and
management’s inability to reassure investors about growth expectations led
to a loss of confidence, prompting our exit from the position. In Kuwait, our
underweight to financials also detracted from performance. The sector rallied
on hopes for new debt and mortgage legislation and signs of domestic political
stabilisation.
Saudi Arabia was the worst-performing market in the EMEA region. Low oil
prices and tight liquidity raised concerns about giga-project spending and
credit growth. While financials contributed positively, our overweight in
Saudi Tadawul weighed on returns due to weaker trading volumes and margin
pressure from increased investment in technology and staffing. Hospital
operator Sulaiman Al Habib also declined on valuation concerns. Meanwhile, our
underweight in Saudi banks proved beneficial, as the sector underperformed due
to falling oil prices and concerns over a slowdown in Vision 2030
giga-projects, alongside a broader rotation out of energy-heavy markets.
Utilities contributed positively, almost entirely due to our underweight in
ACWA Power. The Saudi utility traded at elevated valuation multiples and
experienced a sharp sell-off following weak results, subdued guidance, and the
announcement of a rights issue.
Turkey was the largest contributor to negative relative returns. Initial
optimism around inflation normalisation and earnings recovery gave way to
political unrest following the mid-March arrest of Istanbul Mayor Ekrem
İmamoğlu on corruption and terrorism-related charges. This triggered
depreciation in the Lira and central bank intervention. Consequently, our
overweight in Yapi Kredi and Akbank hindered performance, as inflationary
pressures and regulatory constraints weighed on the banking sector. Owning
supermarket operator, BIM, also impeded returns due to the challenging macro
and political environment. Additionally, a fine levied by the antitrust board
and the rejection of its share buyback request by the Capital Markets Board
further pressured the stock.
Outlook
In the near term, whilst we have championed the EMEA regions safe haven
status, the dominance of financials within our investable universe does leave
a proportion of our investee companies susceptible to sentiment around
interest rate trajectories, inflation dynamics, and broader growth
expectations. Whilst this is the case, the region is also home to a diverse
set of companies and structural drivers that offer distinct investment
opportunities.
From a European standpoint, countries such as Poland, Greece, and Turkey
present compelling growth potential, underpinned by sound public finances and
a firm commitment to defence spending and military capability. These markets
often benefit from relatively stable political environments, which could be
further supported by a ceasefire in the Ukraine-Russia conflict. Their
independent monetary policy frameworks also provide a degree of resilience.
Within emerging markets, we expect Emerging Europe to be less exposed to
global trade tensions and well-positioned to benefit from nearshoring trends.
Turkey’s shift towards orthodox monetary policy presents a nuanced picture.
While it opens the door to long-term opportunity, it also introduces economic
and political risks. Across the EMEA region, food inflation is easing, and
most central banks have either begun cutting rates or are preparing to do so.
This should support consumption and reduce credit risk across the banking
sector.
In the Gulf Cooperation Council (GCC) states, equity markets continue to
broaden and deepen, with a growing number of public and private companies
coming to market via initial public offerings. Despite persistent geopolitical
risks, the increasing benchmark representation of GCC markets is likely to
attract greater investor attention.
South Africa’s rich natural resource base continues to underpin its
investment case, but the country’s future trajectory is closely linked to
political developments. Last year’s election ushered in a new coalition
government, bringing the market-friendly Democratic Alliance into partnership
with the African National Congress. While the coalition’s performance has
been mixed, sentiment is beginning to shift positively. Should the coalition
hold, there is meaningful scope for structural reform, particularly in labour
markets and business regulation, which could unlock South Africa’s growth
potential and improve living standards.
INVESTMENT APPROACH
Our strategy seeks to diversify the 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 First-hand Expertise Process ESG Integration
An experienced investment team helps to foster strong relationships with the companies in which we invest. The investment team conducts hundreds of company meetings per year, building long-term relationships and insight. Extensive primary research and proprietary fundamental analysis, evaluating companies over a 5-year research horizon with macro considerations incorporated through our Cost of Equity Fully integrated dynamic ESG assessment combined with active engagement to positively influence ESG practices.
approach.
ENGAGEMENT CASE STUDY: Dr Sulaiman Al Habib Medical Services (HMG) - Saudi Arabia/Healthcare
We regularly engage with companies with the aim of improving corporate behaviour or enhancing disclosure levels.
ENGAGEMENT OVERVIEW * Given the significant impact staff turnover can have on HMG’s operating model, we engaged with the company to better understand its recruitment and treatment of nurses.
OBJECTIVE: Enhancing Disclosure * We view the quality of HMG’s service as a key differentiating factor for the company, and its ability to retain its brand loyalty. By having a broader understanding of these approaches, we were able to attain greater confidence in the company’s business model and opportunity.
OUTCOME * As part of our assessment of ESG we place emphasis on areas of a company’s business model which have the highest materiality. HMG’s quality of service remains highly reliant in its ability to attract and retain top talent, with nurses sitting at the forefront.
* In our engagement with management, they were able to clearly articulate how HMG places a heavy emphasis on attracting the best nurses. The majority are found within the Philippines, with nurses from this country in high demand globally. As part of their packages, HMG offers highly competitive salary and benefits. These packages are not only impressive from a local perspective, but highly competitive when compared globally.
* Overall, we feel confident that management are placing significant emphasis on this key area of their business, with the ultimate efficacy of their approach seen in the retention ratio which exceeds 90%.
To ensure consistency of research we utilise a standardised proprietary
assessment framework to capture ESG attributes of each individual company
under research coverage (see Chart A below).
A Focus on ESG
Our proprietary ESG assessment forms a core component of our fundamental
bottom-up research. It is guided by our in-depth knowledge and regular
interactions with company management teams.
As an integral step of our research, our ESG assessment is undertaken by our
equity investment professionals as a fully integrated component of our
investment process. This approach to ESG is anchored by three pillars:
Integration A dynamic, forward-looking approach Active engagement over exclusion
Integrating ESG is core to our fundamental research and allows us to better assess the risks and opportunities for our investments that are not apparent in traditional Our proprietary assessment is aimed at capturing improving or deteriorating standards to highlight and reward more sustainable business practices, rather than relying on static assessments from third parties. We aim to drive positive outcomes through direct engagement with corporate management teams rather than relying on blanket exclusions, potentially unlocking value for our investors.
finance analysis. This influences both our quality assessment of a company as well as its valuation and is therefore integral to decision making.
Chart A – Fundamental Research: Example ESG Scorecard
Key Topics Data / Issues to Consider
Sustainability 1 Employee Employee Relations: Staff Turnover; Strikes; Remuneration of Staff; Fair Wages; Injuries; Fatalities; Unionised Workforce; Employee Engagement,
of the Satisfaction Diversity & Inclusion.
Business
Model (Franchise)
2 Resource Water Usage; GHG Emissions; Energy; Transition Risks.
Intensity
3 Traceability/ Traceability of Key Inputs; Investments in Protecting the Business from External Threats, e.g., Cyber Security, Physical Risks from Climate Change; Backward Integration (Protection of Key Inputs); Transition Risks in Supply Chain.
Security in Supply Chain
Corporate 4 Effectiveness Sound Management Structures: Separation of Chairman & CEO; Size of Board; Independence of Board; Frequency of Meetings; Attendance Record; Voting Structure; Female Participation on Boards.
Governance of Supervisory/
Credibility (Management) Management
Board
5 Credibility Credible Auditor; Independent Audit Committee; Qualification to Accounts.
of Auditing
Arrangements
6 Transparency & Access To Management; Financial Reporting; Tax Disclosure and Compliance; Appropriate Incentive Structure; Remuneration of Staff; Gender & Diversity Considerations; Employee Relations.
Accountability of
Management
Hidden 7 Environmental GHG Emissions; Carbon Intensity; History of Environmental Fines/Sanctions; Reduction Programmes in Place for Water/Waste/Resource Intensity, Air Quality; Transition Risks; Physical Risks from Climate Change.
Risks on the Footprint
Balance Sheet (Balance
Sheet)
8 Societal Impact Health/Wellness implications of Consumption of goods/services; Product Safety Issues; Community Engagement.
of Products/
Services
9 Business Ethics Anti-competitive practices; Bribery/Corruption; Whistle-Blower Policy; Litigation Risk; Tax Compliance; Freedom of Speech; Anti-Slavery and Human Rights; Gender & Diversity Considerations.
ESG and its impact on company valuation
ESG influences the company-specific risk premium that forms a portion of the
overall discount rate attributed to the company for valuation and identifying
potential mispricing. Each company under research coverage will be assessed by
the relevant investment professional using a dynamic framework, where the nine
ESG sub-categories will each be assigned a rating of unfavourable, not
improving, improving or exemplary.
Each sub-category is equally weighted and the sum of the nine ratings will
translate into either a positive or negative adjustment ranging from -1% to
+2% to the company’s Cost of Equity (“COE”), which is used to discount
our earnings forecasts. In addition, we have recently introduced a Carbon Cost
assessment for relevant companies that we anticipate will be impacted by costs
associated with reducing greenhouse gas (GHG) emissions, which can add a
further 2% to the company’s COE.
For further detail on our approach to ESG integration and our Carbon Cost
assessment, please use the links provided in the 2025 Annual Report and
Accounts.
Baring Asset Management Limited
Investment Manager
4 December 2025
DETAILED INFORMATION
Barings Emerging EMEA Opportunities PLC's Annual Report and Accounts for the
year ended 30 September 2025 along with the Notice of Meeting for the
Company's AGM 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, Andreea Caraveteanu
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
ENDS
Neither the contents of the Company’s website nor the contents of any
website accessible from hyperlinks on the website (or any website) is
incorporated into, or forms part of, this announcement.
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