High Growth Opportunities in a Low Growth World
With over thirty years of experience in smaller emerging and frontier markets, our investment approach has always placed a strong emphasis on applying a strict macro overlay. This enables us to carefully identify the stock that in our view benefit most from structural local reforms and avoid potential crises.
To begin with, it seems like the challenging situations in some countries are not improving. Nations such as Egypt, Kenya, Bangladesh, and Pakistan are still experiencing the adverse effects of high oil and food prices. The trade balances of these countries do not indicate any positive developments either. Eastern Europe is also facing difficulties, but the situation is becoming more selective as politicians are starting to take action and implement energy policies that their citizens demand. Unfortunately, this has come too late for the winter, and there seems to be no visible end to the war in the region. At present, our Lead Analyst is in the area, ensuring that we have accurate information.
On the positive side, as evidenced through performance, the themes in the portfolio have been playing out very well.
Kazakhstan is broadening its geopolitical outlook to decrease its dependence on Russia, although it cannot completely eradicate the risk. The price of uranium has risen from $53 to $70, indicating a promising trend, and both the corporations and the country can benefit from the operational leverage.
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