REG-Barings Emerging EMEA Opportunities Plc: Half Year Report
06/06/2025 07:02
Barings Emerging EMEA Opportunities PLC
Half Year Report for the six months ended 31 March 2025
The Directors are pleased to present the Half-Year Financial Report of the
Company for the six months ended 31 March 2025.
Barings Emerging EMEA Opportunities PLC (LSE: BEMO) is pleased to declare an
interim dividend of 6 pence per Ordinary Share in respect of the financial
period ending 31 March 2025.
The dividend will be paid on 25 July 2025 to shareholders on the register as
at 20 June 2025. The ex-dividend date is 19 June 2025, and the DRIP election
date is also 20 June 2025. Further details can be found in the Chairman’s
Statement below.
Financial Highlights
NAV total return 1,# Share price total return 1,# Dividend per Ordinary Share 1,#
10.0% 20.0% 6.0p
(31 March 2024: 13.2%) (31 March 2024: 12.8%) (31 March 2024: 6.0p)
For the six months ended 31 March 2025 2024 % change
NAV per Ordinary Share 1 765.2p 682.1p 12.2%
Share price 652.5p 532.5p 22.5%
Share price total return 1,# 20.0% 12.8%
Benchmark 7.8% 5.8%
Discount to NAV per Ordinary Share 1 14.7% 21.9%
Dividend yield 1,2,3 2.8% 3.2%
Ongoing charges 1 1.6% 1.8%
Return per Ordinary Share 31 March 2025 31 March 2024 30 September 2024
Revenue Capital Total Revenue Capital Total Revenue Capital Total
4.25p 67.07p 71.32p 5.54p 69.89p 75.43p 18.97p 86.71p 105.68p
Revenue return (earnings) per Ordinary Share is based on the revenue return of
£501,000 (31 March 2024: £653,000; and the full year to 30 September 2024:
£2,238,000). Capital return per Ordinary Share for the half year is based on
a net capital gain of £7,913,000 (31 March 2024: net capital gain of
£8,245,000; and full year to 30 September 2024: net capital gains of
£10,229,000). These calculations are based on the weighted average of
11,796,902 (31 March 2024: 11,796,902; and 30 September 2024: 11,796,902)
Ordinary Shares in issue during the period/year.
As at 31 March 2025, there were 11,796,902 Ordinary Shares of 10 pence each in
issue (31 March 2024: 11,796,902; and 30 September 2024: 11,796,902) which
excludes 3,318,207 Ordinary Shares held in treasury (31 March 2024: 3,318,207;
and 30 September 2024: 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 2025, 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 2025 is comprised of the 2024 final dividend of
12.5 pence per share and the interim dividend for the six months to 31 March
2025 of 6 pence per share, based on the share price as at 31 March 2025.
3 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.
* 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
To date, this financial period has continued the trend of the prior year in
delivering strong capital growth to our shareholders. It gives me great
pleasure to report that our Investment Manager delivered a NAV total return of
10%, outperforming the comparator benchmark by 2.2%. This strong performance
in both absolute and relative terms serves to highlight the attractive
diversification offered by the EM EMEA region relative to other equity
investment strategies. Furthermore, this return was even stronger when
compared to benchmark indices for developed and emerging equity markets, which
it outperformed by 8.1% and 11.6% respectively in GBP terms1.
The relative outperformance of the Company’s NAV total return over the past
two financial years has moved the Company firmly above the benchmark over one,
three, five, and ten-year periods. This performance has strengthened the
Board’s belief in the Company’s proposition, which provides exposure to
high-growth economies in an under-researched region, while also offering
dividend streams that are already attractive and likely to increase.
Whilst we are delighted with this outcome, the Investment Manager has
cautioned that the outlook ahead has become increasingly uncertain, not just
for your Company, but for all economies globally. This follows rising market
volatility stemming from US-led trade policy, which has sent shock waves
through traditional supply chains and raised business uncertainty. Despite
this unfavourable backdrop, the Investment Manager continues to emphasise the
distinctive attractions of the EM EMEA region, which has a lower exposure to
the United States in terms of goods exports and a higher concentration of
locally dominant business models. This, in turn, should provide the region
with a degree of insulation from the current trade uncertainty. However, we
remain vigilant about the impact of falling global growth.
Investment Portfolio
The portfolio’s holdings in Central and Eastern Europe were the strongest
performers. This uplift, however, owes much to geopolitics, as increasing
hopes about the prospect of an end to the war in Ukraine lifted valuations
higher. For all the deep uncertainties about the end of the war, the recent
market performance offers insight into the region’s potential to deliver
strong returns in the event of a lasting ceasefire. Central European nations
such as Poland are uniquely positioned to benefit, given their proximity to
the war zone and the improvements that an end to the fighting would bring for
sentiment, investment, and earnings expectations.
In contrast, Saudi Arabia, our portfolio’s largest market, underperformed
the EMEA region (while still outperforming both developed and emerging market
indices in GBP terms1). Broadly, Middle Eastern
economies have greater sensitivity to lower growth expectations and a weaker
US Dollar – both effects of increasing trade uncertainty. Kuwait and the
UAE, however, managed to defy this trend thanks to country-specific factors.
Kuwait benefitted from the introduction of a new debt law, while the UAE saw
increased inflows of investment capital attracted by the country’s
increasingly diversified economy.
1Indices based on relevant MSCI Regional Indices
In my last update, I highlighted the welcome developments in South Africa
following a once-in-a-generation election result that forced the African
National Congress (‘ANC’) into a coalition to govern. This financial year
has taken some of the shine off this promise, as investors await evidence of
effective reform implementation. Despite this, the market has offered strong
stock selection opportunities from which your Company has benefitted, with its
investments in gold stocks in particular delivering strong absolute and
relative returns for shareholders as precious metals demand
soared to new highs.
HALF YEAR PERFORMANCE: 1 OCTOBER 2024 TO 31 MARCH 2025 (%, GBP) - BEMO PLC vs.
COMPARATIVE BENCHMARKS1
Investment/Benchmark Performance (%)
BEMO PLC 10.0%
MSCI EM EMEA 7.8%
AIC Global Emerging Markets Sector Average 3.7%
Developed Markets 1.9%
Emerging Markets -1.6%
1 Indices based on relevant MSCI Regional Indices. Source: Barings, Refinativ, Morningstar, 31 March 2025.
In contrast, Turkey delivered a negative absolute return over the period. The
main cause was the arrest of Istanbul Mayor Ekrem İmamoğlu, seen as
President Erdoğan's main rival. This incident has
highlighted the weakness of institutions and the rule of law, challenging
Turkey’s investment rationale. Although these developments are
disappointing, their negative impact on the Company’s performance has been
limited by the low weighting of Turkey in our portfolio.
Russian Assets
Russian assets in the portfolio continue to be valued at zero while extensive
sanctions and restrictions on the sale of securities remain 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 £1 million from the sale of
Nebius N.V. (formerly Yandex N.V.) following three realisations of 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 remains focused on the value that the Company’s remaining Russian
holdings may generate for shareholders and 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 31 March 2025 was 14.7%, and the average discount during
the period was 16.3%. Although this compares favourably with the discount of
21.9% as of 31 March 2024, the average discount of the Company has widened
since the write-down of Russian assets in the first quarter of 2022. This,
along with elevated levels of broader market volatility within our investment
universe and global equity markets, has also heightened discount volatility.
This impact is not unique to the Company and has affected many investment
trusts.
The Board continues to focus on discount management, aiming to contain
discount volatility. While share buybacks remain an option available for 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.
Discount Control Mechanism and Strategic Options
The Company has now entered the last year before the discount and performance
targets set in October 2020, in conjunction with the broadening of the
investment mandate, will be tested. While the portfolio’s outperformance
since 2022 puts the performance target within realistic reach, the Board
foresees the discount management target being missed. If the September 2025
targets are not met, the Board will consider the case for a tender offer
alongside other strategic options, taking account of the Company’s remaining
Russian assets.
Gearing
There were no borrowings during the period. As of 31 March 2025, there was net
cash of £3.3 million (30 September 2024: £3.8 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 under review, the income account
generated a return of 4.3 pence per Ordinary Share, compared with 5.5 pence
over the same period last year. The Directors are declaring an interim
dividend of 6 pence per share, by utilising revenue reserves. Based on
dividends paid over the prior 12 months, and on the share price as of 31 March
2025, the Company’s shares yielded 2.8%. The Board believes that this
remains an attractive yield. The Company retains the flexibility to pay out up
to 1% of NAV per annum from capital as income to shareholders.
.
Outlook
Looking ahead, economic activity prospects remain uncertain in the light of
growing trade frictions. While risks may well be reduced somewhat by
progress in trade negotiations, markets are likely to be more sensitive to
signs of deteriorating earnings. This makes bottom-up stock selection a more
powerful driver of performance than ever, providing real value to
shareholders.
The Company’s strategy therefore, remains firmly focused on the earnings
profile of the individual companies in our portfolio, seeking out management
teams with strong records of growth and returns
to shareholders.
Emerging Europe’s domestically driven economies have benefitted from a lower
exposure to recent trade-induced shifts. However, looking ahead, Europe’s
refocus on its domestic agenda, including increased military spending and
self-reliance, positions Central and Emerging Europe as unique and
cost-effective manufacturing destinations. This shift bolsters the region’s
growth prospects. Plausible
outcomes of the Ukraine war reinforce this positive potential in two ways.
Firstly, an end to hostilities would reduce risks. Secondly, residual security
threats will maintain the incentive to expand defence manufacturing capacity,
thereby supporting aggregate demand.
In light of the weakness in the price of oil and the US dollar, Middle Eastern
economies look set to remain relatively subdued. This has led countries in the
region to recalibrate and reprioritise their large-scale investment projects
as oil-related revenues have fallen. While investment is slowing, increased
prudence is welcome, positioning these economies to reap a higher economic
benefit when the backdrop turns more favourable.
In South Africa, although precious metals have offered a relative safe haven
amidst the recent market turmoil, the outlook for the economy rests firmly on
the ultimate success of the Government of National Unity. If this coalition
can continue to manage its internal tensions and push through the reforms
South Africa desperately needs, we could begin to see the country’s promise
coming to the investment forefront once again.
Promotional Activity
The Board and Investment Manager have an ongoing communications programme that
seeks to maintain the Company’s profile and its investment remit,
particularly among retail investors. During the 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’.
Frances Daley
Chairman
6 June 2025
Report of the Investment Manager
EMEA MARKET PERFORMANCE AND CURRENCY RETURNS – 1 OCTOBER 2024 TO 31 MARCH
20251
Market Returns (%, GBP) Currency Returns (%, GBP)
Czech Republic 35.0% Czech Republic 1.6%
Poland 20.7% Poland 2.9%
Greece 20.4% Greece 0.6%
Hungary 19.9% Hungary -0.8%
Kuwait 17.1% Kuwait 2.5%
UAE 17.0% UAE 3.5%
Saudi Arabia 4.0% Saudi Arabia 3.5%
South Africa 4.0% South Africa -2.3%
Qatar 2.6% Qatar 3.3%
Egypt -0.6% Egypt -1.2%
Turkey -8.4% Turkey -6.7%
1 Market Returns, based on MSCI indices, and currency returns in GBP.
Source: Barings, Refinativ, 31 March
2025.
Market Summary
Emerging European, Middle Eastern, and African (EMEA) equity markets advanced
over the period, with the MSCI EM EMEA index increasing by 7.8% in GBP
terms. Against this backdrop, the portfolio outperformed, with the
Company’s NAV increasing by 10% in GBP terms, providing a positive relative
return of 2.2%.
Regionally, markets in Central and Eastern Europe were some of the best
performers across EMEA, with the Czech Republic, Poland, Greece, and Hungary
returning 20-35% in GBP terms. While stock-
specific developments contributed to this strong performance, the major driver
was growing hopes for a ceasefire in Ukraine. The resulting improvement in
risk perceptions propelled markets higher.
Although returns in the region were notably strong, we acknowledge that the
future has become more uncertain. This is largely due to the ambiguity
introduced by President Trump’s trade policies, which have significantly
dampened business confidence, leading many companies to pause investment plans
and raising expectations of slower economic growth.
Amongst EMEA markets, the Middle East’s economies are the worst affected by
the resulting weakening of global growth expectations and the US dollar, which
point to lower demand for oil. Lower oil prices reduce the earnings outlook of
companies listed on local exchanges, with Saudi Arabian companies being
particularly impacted.
Conversely, Kuwait and the UAE have managed to challenge this trend.
Kuwait’s equity market, with its heavy concentration on financial services,
responded positively to the unveiling of a new debt law and expectations of a
forthcoming mortgage law. The UAE market’s strong performance has been
driven by a relatively better earnings outlook, reflecting its more
diversified economy.
South African equities’ relatively muted performance reflects two opposing
forces. The large financial sector has been subject to profit-taking as
investors digest the ongoing fiscal consolidation undertaken by the new
Government of National Unity, formed last year. At the same time, gold stocks
have risen significantly as demand for the yellow metal soared to new highs.
This has led to a significant degree of divergence in share price performance
and many stock selection opportunities in South Africa — a situation that
plays to the Company’s strengths as a bottom-up investor.
Turkey was one of only two markets in which the Company is invested that lost
ground over the period. Disappointingly, while the central bank has returned
to orthodoxy in its monetary policy, the arrest of Istanbul Mayor Ekrem
İmamoğlu, seen as President Erdoğan's main rival, cast doubt on the
investment case for Turkey and has left the national currency (lira)
significantly weaker.
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.
We regularly emphasise that the region in which we invest offers not only
unrecognised growth potential but also attractive levels of income,
solidifying its place as a strong income diversifier.
We believe there are good prospects for further expansion of dividends, due to
rising payout ratios and efficiency gains.
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 negative effects on performance from major macro dislocations.
Trump Tariffs: Uncertainty Abounds
This year has seen a resurgence in market volatility following the
introduction of trade tariffs by the Trump administration on imports from
traditional allies and adversaries alike. Given the unconstrained and
erratic nature of this shift in policy, the resulting uncertainty is causing
businesses to put their investment plans on hold. This could ultimately result
in a global environment of lower investment and weakened growth, increasing
the risk of recession.
As investors continue to digest these developments, attention will begin to
refocus on what is observable, namely the exposure of various nations’
economies and stock markets to the US. In this context, EMEA stands out as
having relatively low direct exposure to the US in the form of goods exports,
while its stock exchanges predominantly feature companies with locally
dominant business models. We believe this should position the region to be
more defensive due to its sensitivity to the current trade uncertainty.
Central Europe: A ceasefire in Ukraine?
An important development this year has been the implications of the new US
administration’s goal of bringing about a ceasefire in Ukraine. The European
political reaction to US policy on Ukraine, perceived as weakening traditional
alliances, has refocused Europe on investing more in its defence. This shift
is likely to spur higher military budgets, which will probably be spent on a
new foundation of European-led defence manufacturing. Furthermore, this
geopolitical development has arguably influenced Germany to kick off a €500
billion infrastructure programme funded by the reform of its constitutional
‘debt brake’. This fiscal policy shift in Germany has the potential to
reinvigorate the wider European economy.
In addition, a Ukraine/Russia ceasefire— if achieved — would support
Europe in three key areas. First, the immediate lowering of risk sentiment
would lift European valuations generally, with Central European nations
benefitting disproportionately. Second, a resolution would likely reduce
energy prices throughout Europe, benefitting consumers and industry, and
supporting corporate profitability. Third, upward revisions to growth
expectations could encourage investment and improve sentiment. Central
European nations such as Poland, have a higher proportion of sales and
earnings generated domestically, and should therefore be particularly well
positioned to benefit.
South Africa: Gold Rush
Gold has soared in price from $1,800 per troy ounce at the end of 2023 to
trading close to $3,400 by March 2025. This upward movement has been fuelled
by a range of factors, including war, inflation, and increased weighting of
gold in international reserves by central banks. For some, the current
interest in gold reflects concern for the state of the global economy. For
others, it reflects a much narrower concern, namely, an overreliance on the US
dollar.
To that end, 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 United States. This shift in central bank purchasing
fundamentally changes the behaviour of gold as an asset class, providing a
greater degree of stability. This has been observed most recently as
speculators fled the market, but prices continued to rise amid an expansion of
central bank buying.
When looking at places to invest in gold, South Africa stands out. It boasts
the world’s largest known gold reserves, primarily concentrated in the
Witwatersrand Basin, with its South Deep mine holding the largest remaining
gold reserves in the world. Indicating not only gold’s improving
fundamentals but also the move toward safe-haven assets at a time of rising
volatility, our portfolio benefitted significantly from its exposure to gold,
with our positions in Gold Fields and AngloGold both delivering close to 70%
returns in GBP for the first quarter of 2025.
Turkey: Snakes and Ladders
In our last update, we wrote about the green shoots taking hold in Turkey’s
economy as President Recep Erdoğan seemingly re-embraced orthodox monetary
policy by appointing the well-respected Mehmet Simsek as Minister of Treasury
and Economics. The move aimed to convince investors that Turkey was prepared
to rebalance its economy, and it had begun to bear fruit in the form of
greater credibility and falling inflation.
Asset Allocation
Portfolio Country Weight Portfolio Sector Weight
Saudi Arabia 30.4% Financials 49.9%
South Africa 24.6% Materials 15.6%
UAE 11.8% Communication Services 7.7%
Poland 8.5% Energy 5.5%
Greece 5.8% Consumer Staples 5.2%
Hungary 5.5% Information Technology 4.9%
Turkey 4.1% Real Estate 4.0%
Kuwait 3.8% Health Care 3.8%
Qatar 3.7% Consumer Discretionary 2.3%
Czech Republic 1.9% Industrials 1.1%
Source: BEMO PLC. 31 March
2025. Source: BEMO PLC. 31
March 2025.
However, this positive trend was reversed by the resurgence of political risk
with the arrest in March 2025 of Istanbul Mayor Ekrem İmamoğlu, seen as
President Erdoğan’s main rival, along with several other opposition
figures. This development raises concerns about the broader reform agenda in
Turkey and points to a weakening of institutions and the rule of law. Since
foreign direct investment rests on three key pillars — the rule of law;
political and structural stability; and a trusted, established system in which
to raise and arbitrate disputes — these events in Turkey have delivered a
blow to all three pillars, resulting in significant weakening in the Turkish
lira.
While these developments in Turkey are disappointing, Turkey represents only a
small proportion of our portfolio. Moreover, in response to rising political
risk that could dent central bank credibility in delivering lower inflation
and a stable currency, we reduced the Company’s Turkey risk exposure to
neutral relative to the benchmark weight by taking profits in several
companies within the portfolio that had delivered significant returns in 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 was the main driver of the portfolio’s relative return over
the period, whilst sector asset allocation had a small positive impact.
The Middle East was the largest contributor to the relative performance, with
Saudi Arabia and, to a lesser extent, the UAE generating alpha across a range
of sectors. From a sector perspective, stock selection in the energy and
financial sectors, in addition to being underweight in utilities and IT
services, drove performance across the Middle East region. In financials, our
overweight in Abu Dhabi Commercial Bank was the best performer as it reported
strong results for the year ending December 2024 that surpassed market
expectations. The bank also raised guidance for this year and provided a set
of medium-term targets, which the market took positively. Saudi Arabia’s Al
Rajhi, the world’s largest Islamic bank, was another overweight position
that also contributed positively, beating third-quarter earnings expectations
and raising guidance.
In Saudi Arabia, our underweight positioning in utility company ACWA and
information technology company ELM further added to returns, as the share
prices of both those companies fell back following weak results and guidance.
In the energy sector, our core overweight holding in ADNOC Drilling in the UAE
was a strong contributor to relative returns as the company posted solid
results for the year ending December 2024, as it continues to execute on its
growth strategy whilst delivering cost efficiencies.
The materials sector in South Africa was a strong source of alpha generation,
with investors gravitating toward gold and precious metal stocks, driving up
Goldfields, AngloGold Ashanti, and Impala Platinum.
Amsterdam-based holding company Nebius was the best performer within the
communication sector following the divestment of its stake in Russia’s
Yandex and its subsequent re-listing on the Nasdaq exchange. We took advantage
of this liquidity event and sold out of our position, as we do not consider
the company to be core to our investment mandate.
Financials were the strongest contributor to relative returns. Greek banks
Alpha and Piraeus were standout performers, supported by a combination of
undemanding valuations, high quality assets, and a positive macroeconomic
backdrop. In Poland, insurance company PZU also benefitted from relative
returns, as investors applauded the new interim CEO’s strategic goals of
improving corporate governance, which includes its dividend policy, and
focusing on long-term value creation. Elsewhere, PKO Bank also delivered
strong results with sequential net interest margin improvement and rising
anticipation of accelerated lending this year. In Hungary, local bank OTP
achieved an all-time high as the equity risk premium dropped on hopes for a
potential détente between Russia and Ukraine. Offsetting positive relative
returns within financials, our overweight in South African bank FirstRand
detracted from the portfolio’s performance, as investors priced in further
potential fines relating to the
bank’s UK subsidiary, with a number of peers increasing provisioning
relating to the Financial Conduct Authority’s investigation into
discretionary commission arrangements within UK motor finance.
The sharp increase in political risk in Turkey, as discussed above, dented
investors’ confidence that had been built up by the country’s previous
pivot towards orthodox monetary policy, and forced the central bank to
intervene in support of the Turkish lira. Our investment in Yapi Kredi Bank
suffered as a result, making Turkey the main detractor from performance during
the reporting period.
Outlook
Political and economic uncertainty are likely to remain present for the
remainder of the year. As a result, we remain vigilant concerning the impact
of greater volatility generated by news headlines. Despite this, we believe
the EMEA region is uniquely positioned to manoeuvre successfully through the
changing geopolitical landscape. Whilst not immune to a potential slowdown in
the global economy, the combination of domestic drivers, a possible resolution
to the Ukraine/Russia conflict, and limited exposure to US tariffs should
mitigate some risk.
Looking at Emerging Europe, we believe that its domestically oriented
economies have the ability to withstand the shocks of global trade conflicts
while being able to capitalise on nearshoring opportunities by being a
cost-effective manufacturing destination as Europe refocuses on its domestic
agenda. Furthermore, the new US administration’s diplomatic efforts toward
Russia, aimed at addressing the conflict stemming from Russia’s aggression
in Ukraine, are expected to enhance the investment appeal of Emerging European
equity markets and bolster the region’s growth prospects.
As regards the Middle East, the structural transformation of its economies and
overall society will continue over the long term, but the pace of capital
investments and reforms may have to be slowed as oil-related revenues
moderate. Despite this, the region’s stock exchanges continue to broaden and
deepen as new companies come to market, making the region increasingly
relevant to a host of new investors across the emerging market sphere.
Turkey’s investment case is now at a crossroads. The country’s economic
team, led by Mehmet Simsek, has taken steps to keep Turkey on the path of
orthodox economic policy. However, what Turkey does politically will be
crucial. Moving towards democracy can ultimately continue the transition of
Turkey’s investment case from being cyclical to structural, providing the
necessary ingredient to boost Turkey’s credibility and ultimately attract
foreign capital.
Finally, whilst South Africa’s rich natural resources have kept a shine on
this region, the investment case for the country hinges on its political
development. Last year’s elections produced a new governing coalition,
bringing the market-friendly Democratic Alliance into government alongside the
incumbent African National Congress. We share the hopes of many South
Africans that this change marks an inflection point after a frustrating period
of stagnant growth and unemployment. If this coalition can hold, there is a
wealth of opportunity for structural reform to take hold, notably in areas
such as the labour market and business regulation, unlocking South Africa’s
growth potential and boosting living standards.
Baring Asset Management Limited
Investment Manager
6 June 2025
Detailed Information
Barings Emerging EMEA Opportunities PLC's Half Year Report for the period
ended 31 March 2025 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
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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