Marketing Director, Asia Frontier Capital

Asia Frontier Capital

Marketing Director

Investing in high growth Asian frontier economies.

Asia Frontier Capital Ltd. is a pioneering fund management company based in Hong Kong that specializes in investing in high growth Asian frontier economies by managing the AFC Asia Frontier Fund , AFC Iraq Fund and the AFC Vietnam Fund.

The AFC Asia Frontier Fund invests in public equities of Asian frontier countries that are seeing increasing consumption due to favorable demographic trends, rising incomes and high GDP growth. The fund invests in listed equities of companies that have their principal business activities in Bangladesh, Bhutan, Cambodia, Iraq, Laos, Maldives, Mongolia, Myanmar (Burma), Nepal, Pakistan, Papua New Guinea, Sri Lanka and Vietnam. The AFC Asia Frontier Fund is positioned to take advantage of the continuing economic shifts in these countries and offers high returns combined with significant diversification opportunities. This fund is directed by the founder and CEO of Asia Frontier Capital, Thomas Hugger, who has been investing in frontier markets across Asia and Africa for more than 20 years.

The AFC Iraq Fund was launched on the 26th June 2015 and aims to achieve long-term capital appreciation for investors by capturing value and growth potential in the post conflict high-growth & resource rich Iraq market. The fund emphasises long term investment horizon to truly capture the opportunity in Iraq. The fund's investable universe consists of locally listed companies that have their principal business activities in Iraq as well as foreign listed companies that have the majority of the business in Iraq as a whole including the prosperous Kurdish Region of Iraq (KRI). The AFC Iraq Fund offers access to investments in post conflict recovery potential of Iraq, including the KRI, and/or stability in its territory. The AFC Iraq Fund is managed by Asia Frontier Capital (Iraq) Limited, Cayman Islands under the executive leadership team of Thomas Hugger (CEO & Fund Manager) and Ahmed Tabaqchali (CIO) who have more than 47 years of investment experience as well as an extensive background covering global, emerging, frontier and MENA markets.

The AFC Vietnam Fund invests exclusively in listed Vietnamese equities to capture value in growth companies with a focus on the small to medium size companies. This market segment offers a unique investment opportunity as the valuation gap between large- and small-cap stocks in Vietnam is presently much wider than in comparable neighboring markets and the valuations are significantly depressed versus their regional peers. The fund adopts a fundamental-quantitative approach and employs an in-house earnings model to identify attractive companies where we see high growth opportunities. In conjunction with targeting the maximum upside potential the portfolio has been structured to mitigate corporate government and liquidity risks. The fund invests in a diversified portfolio of 70-90 attractively valued companies to carefully control concentration risk.  This approach allows the fund to sell, or buy, positions without having a significant market impact. The fund is directed under the executive leadership of Thomas Hugger and Andreas Vogelsanger who have more than 50 years combined experience managing investments in frontier markets, Asia and around the world.

For more information about the fund, management team and investment strategy please contact us at info@asiafrontiercapital.com.

Cross Asset Strategy

<ul><li>Asian frontier markets had another solid month led by gains in Pakistan and Sri Lanka.</li><li>The ongoing upward re-rating in Asian frontier markets does not surprise us as we have been communicating since the end of 2022 that this would happen as inflation and interest rates are peaking and our universe will rally strongly given that our markets entered 2023 at significantly discounted valuations.</li><li>Year-to-date, many Asian frontier markets have significantly outperformed the region. </li></ul>

Asian frontier markets had another solid month led by gains in Pakistan and Sri Lanka.The ongoing upward re-rating in Asian frontier markets does not surprise us as we have been communicating since the end of 2022 that this would happen as inflation and interest rates are peaking and our universe will rally strongly given that our markets entered 2023 at significantly discounted valuations.Year-to-date, many Asian frontier markets have significantly outperformed the region. 

The Re-Rating in Asian Frontier Markets Has Begun - July 2023 Update

<ul><li>The AFC Iraq Fund was up an estimated 8.2%, underperforming its benchmark, the Rabee Securities RSISX USD Index, which was up 9.2%.</li><li>For the year, the AFC Iraq Fund is up an estimated 49.9%, outperforming its benchmark’s 42.3% increase.</li><li>The market’s technical picture continues to be positive, with the macroeconomic fundamentals discussed<span style="font-size: var(--content-font-size);"> last year supporting our view that the market’s uptrend will likely remain in force. </span></li></ul>

The AFC Iraq Fund was up an estimated 8.2%, underperforming its benchmark, the Rabee Securities RSISX USD Index, which was up 9.2%.For the year, the AFC Iraq Fund is up an estimated 49.9%, outperforming its benchmark’s 42.3% increase.The market’s technical picture continues to be positive, with the macroeconomic fundamentals discussed last year supporting our view that the market’s uptrend will likely remain in force. 

AFC Iraq Fund July 2023 Update: "Market Rallies as It Begins to Discount the Budget's Passage"

<ul><li>July saw most of the fund’s portfolio companies complete their filing of annual 2022 results, as well as results for the second quarter of 2023.</li><li>In short, earnings continue to impress! While we are seeing multiple compression as share prices remain relatively flat, this gives us the opportunity to continue deploying capital into Uzbekistan’s blue-chip companies at attractive prices, in anticipation of the next phase of the re-rating.</li><li>The July 2023 fund NAV fell to an estimated USD 1,831.2 (-0.8%) or +83.1% since inception on 29th March 2019.</li></ul>

July saw most of the fund’s portfolio companies complete their filing of annual 2022 results, as well as results for the second quarter of 2023.In short, earnings continue to impress! While we are seeing multiple compression as share prices remain relatively flat, this gives us the opportunity to continue deploying capital into Uzbekistan’s blue-chip companies at attractive prices, in anticipation of the next phase of the re-rating.The July 2023 fund NAV fell to an estimated USD 1,831.2 (-0.8%) or +83.1% since inception on 29th March 2019.

<ul><li>In July, the Vietnamese stock market received robust backing from local retail investors who were enthused by the positive macro-economic indicators, leading to an upswing in investment sentiment.</li><li>As a result, the VN-Index surged by an impressive 9.11%, reaching 1,222.9 points and surpassing the critical 1,200 level.</li><li>This marked a significant milestone for the market.<br> </li></ul>

In July, the Vietnamese stock market received robust backing from local retail investors who were enthused by the positive macro-economic indicators, leading to an upswing in investment sentiment.As a result, the VN-Index surged by an impressive 9.11%, reaching 1,222.9 points and surpassing the critical 1,200 level.This marked a significant milestone for the market.  

<ul><li>We have added Sri Lanka to our top country picks after our recent visit to the country in June 2023.</li><li>The country’s macroeconomic position has stabilised, and this is a turnaround story as extremely cheap valuations get re-rated by declining interest rates which we expect will fall significantly as inflation drops.</li><li>Furthermore, a strong rebound in tourism and remittance earnings will support an improving macroeconomic position and, more importantly, help build foreign exchange reserves.</li></ul>

We have added Sri Lanka to our top country picks after our recent visit to the country in June 2023.The country’s macroeconomic position has stabilised, and this is a turnaround story as extremely cheap valuations get re-rated by declining interest rates which we expect will fall significantly as inflation drops.Furthermore, a strong rebound in tourism and remittance earnings will support an improving macroeconomic position and, more importantly, help build foreign exchange reserves.

Sri Lanka's Stock Market Rallies on an Improving Outlook - June 2023 Update