Top Emerging Market Picks
Frontier markets fund manager, James Bannan of Coeli Asset Management shared his top frontier market country, sector, and stock picks in a recent conversation with Frontera. As part of its investment approach towards the frontier markets (FRN) (FM), Coeli Asset Management is a long-term holder of high quality (high ROIC) companies that give domestic exposure.
Consumer sector preference
From the frontier market universe, Coeli’s frontier market portfolio is heavily tilted towards the Asian (AAXJ) markets. Apart from Asia, there are also certain opportunities in the MEA (Middle-East & Africa) (GAF) region, which Coeli finds investment-worthy. From a sector perspective, Coeli’s frontier market portfolio is heavily tilted towards the consumer sector, which commands a good 45.6% of the fund’s assets.
The Jordan-based tobacco and cigarettes manufacturer and seller, Al-Eqbal, alone commands a 4.7% share (3rd largest holdings) of Coeli’s frontier market portfolio. Al-Eqbal is listed on the Jordan Stock Exchange with the ticker EICO. The stock currently trades at a P/E of 18.86, relative to a peer median P/E of 20.19.
Attractive Consumer Companies with Discounted Valuations
Within Africa, Bannan highlighted some consumer companies with attractive long-term prospects at heavily discounted valuations. These are:
- Tanzania Breweries Limited: TBL is the oldest and largest brewing company in Tanzania. It is a subsidiary of SABMiller (SBMRY). The company trades under the ticker TBL on the Dar es Salaam Stock Exchange at a current price multiple (P/E) of 16.84, relative to a peer median of 17.84. Over the last 3 months, the company’s stock is up 5.26% (as of April 13).
- Fan Milk Limited: FML manufacturers and distributes dairy products and fruit drinks in Ghana. The company trades under the ticker FML on the Ghana Stock Exchange at a current price multiple (P/E) of 19.72, relative to a peer median of 24.9. On YTD basis, the company’s stock is up 1.53% (as of April 14).
- Délice Holding: Delice is a fresh dairy product company in Tunisia. Délice Danone is part of Danone (DANOY). The company trades under the ticker DH on the Tunisia Stock Exchange at a current price multiple (P/E) of 23.10, relative to a peer median of 19.98. On YTD basis, the company’s stock is up 8.51% (as of April 14).