The 6 Largest Frontier Market ADRs Trading On US Exchanges

Frontier markets more resistant to geopolitical headwinds?

When political headwinds or international trade tensions aggravate, many emerging markets (EEM) (VWO) take a hit. This is when frontier markets (FM) (FRN) gain more prominence. Frontier markets are more domestically oriented, and hence are usually found more immune to global demand-supply volatility. US investors can gain exposure to companies based out of these regions through frontier market ADRs (American Depository Receipts) trading on US exchanges.

The 6 largest frontier market ADRs

We filtered out and analyzed a list of the 6 largest frontier market-based companies (by market capitalization) that are trading on US exchanges via ADRs. We have included all the current ‘frontier markets’ as per the MSCI’s country classification, for our analysis, except Argentina (ARGT). We’ve excluded Argentina as a frontier market for this analysis as the country just narrowly missed a MSCI upgrade to emerging market status, and adequately meets most emerging market parameters already. With over 35 Argentina-based companies trading on the US exchange, including big names such as Mercadolibre, Inc. (MELI), YPF Sociedad Anonima (YPF), Banco Macro S.A. (BMA), Telecom Argentina S.A. (TEO), and Grupo Financiero Galicia S.A. (GGAL), Argentina can certainly be considered an outlier amongst other frontier markets. It is believed that the country will likely be upgraded to emerging market status in one of MSCI’s next semi-annual reviews.

TickerNameCountryMarket Cap (in $m)
HKMPFHikma Pharmaceuticals PLCJordan3,835.92
ATXGAddentax Group Corp.Morocco912.46
LEKOFLekoil LimitedNigeria120.01
BMBMDFreedom Holding Corp.Kazakhstan35.28
DUUODuo World, Inc.Sri Lanka29.03
EURIAgriEuro Corp.Romania2.82
Market capitalization figures as of August 30, 2017


Hikma Pharmaceuticals PLC (HKMPF)

Hikma Pharmaceuticals is a Jordan-based multinational pharmaceutical company. The company manufactures branded and non-branded generic and in-licensed pharmaceutical products. Injectables account for about 40% of Hikma’s revenues, and generic drugs and branded drugs constitute 30% each. The company holds the third largest market share in the US in the injectables space. The market for generic injectables is expected to grow at a 10% annual rate.

The ADR trades on the NYSE OTC market with the ticker HKMPF. With a market capitalization of over $3.8 billion, HKMPF is the largest (by market cap) frontier market ADR trading in the US. The ADR was down 29.4% YTD (as of September 8). Expected year-end P/E for the ADR stands at 15.25. 53.3% of analysts that reviewed the stock maintain a HOLD recommendation on the ADR, with 40% recommending a BUY. The company currently faces sector-wide price headwinds which are expected to remain until 2018.

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Addentax Group Corp. (ATXG)

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Morocco-based Addentax Group’s OTC market listed ADR, ATXG, is the second largest frontier market ADR trading in the US. The company provides garment decoration and textile printing services. The ADR commands over $912 million in market capitalization.

Lekoil Limited (LEKOF)

Nigeria-based Lekoil is an Africa focused oil and gas exploration and production company which currently holds interests offshore in Nigeria (NGE) and also offshore Namibia. The company’s ADR, LEKOF, trades on the NYSE’s OTC market, and commands a market capitalization of over $120 million. The ADR was down 33.7% YTD (as of September 11). Expected year-end P/E for the ADR stands at 3.84. 100% of analysts that reviewed the stock have given a BUY recommendation on the ADR.

Freedom Holding Corp. (BMBMD)

Freedom Holding Corp. fka BMB Munai, Inc. is a Kazakhstan-based independent oil and gas company engaged in the exploration, development, and production of crude oil and natural gas. The company’s stock trades on the OTC market with the ticker BMBMD and commands a market cap of over $35 million. The ADR is up 1,420% YTD and trades at a P/E of 6.43.

Duo World, Inc. (DUUO)

Duo World is a software application company specializing in enterprise and cloud business applications for large, medium and small scale businesses. The company’s stock trades on the OTC market with the ticker DUUO, and commands a market cap of over $29 million.

AgriEuro Corp. (EURI)

Romania-based AgriEuro Corp. is engaged in the agriculture, aquaculture, and hospitality businesses. The company’s stock trades on the OTC market with the ticker EURI and commands a market cap of about $3 million. The ADR is down 57.3% YTD (as of September 11).

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