Digital Infrastructure in Emerging Markets

Digitalisation – in particular, mobile internet usage – is driving large-scale social and economic change in emerging and frontier markets around the world. This burgeoning growth is providing access to information, education and financial services for populations that are often rural or living below the poverty line. Nonetheless, the speed and scale of the digitalisation process differs across regions, and sometimes even within individual nations.
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Turkish Elections

Türkiye is currently experiencing one of its most significant humanitarian crises in this century. With over 50,000 casualties and over 26 million people directly affected in the region, the earthquake's immense human tragedy and economic damage have put the timing and outcome of the simultaneous presidential and parliamentary elections currently scheduled for May 14 into question.
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August 2023 Factsheet Overview

Hear from our Senior Analyst, Mark Lebbell, as he provides a market overview and a portfolio update on UEM's performance for August.
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ICM MONTHLY OUTLOOK - DECEMBER 2023

As we draw toward the end of another eventful investing year, evidence suggests that the fog of uncertainty around the course of inflation has finally cleared. Of course, some voices will continue to argue that inflation will remain sticky and that the last mile of disinflation will be the hardest. Yet, regular readers of this letter will know we have never subscribed to this dubious theory. Could we be on the cusp of a new US cycle where we could see a Goldilocks-type economy where conditions are ‘just right’, typically characterised by a combination of low inflation, low unemployment and steady economic growth? Read on to find out more.
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International Container Terminal Services Overview

Hear from our Deputy Portfolio Manager, Jacqueline Broers, as she shares an insight into one of UEM's top holdings, International Container Terminal Services Inc (ICT). ICT operates a global port management company headquartered in the Philippines. It acquires, develops, manages and operates small to medium-sized container terminals worldwide with a focus on origin and destination ports.
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An urbanising world

Emerging markets continue to provide an interesting backdrop for potential investment, as a strong global increase in urbanisation is being driven primarily by the emerging markets of certain Asian countries. As the forces of urbanisation continue to shape markets and societies around the world, it is the investment in infrastructure that will separate regions that are able to channel strong growth into enhanced living standards from those unable to keep up.
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ICM Monthly Outlook - March 2023

More information does not necessarily equal less uncertainty. February was a classic month where more new economic information only served to create more questions and drive further economic uncertainty. The key question facing markets right now is whether this rise in yields and sell-off in equities, especially growth orientated stocks, is just a one-off adjustment to reflect the fact that markets became too complacent and priced in too much inflation relief too quickly? Or does this reflect a more fundamental hawkish shift in Federal Reserve policy, where it is forced to embark on a renewed campaign of setting more restrictive financial conditions?
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ICM Monthly Outlook - September 2023

After running hot for a couple of years, the US economy continues to decompress slowly like a kettle taken off the boil. While inflation is falling and the job market is declining, it is all happening relatively slowly. Economic momentum is declining, but this weakness does not appear to be accelerating, which is good news if we hope to avoid a meaningful recession. Indeed, this slowing momentum, engineered by tighter Federal Reserve policy, has the economy on a glide path to a soft landing and a targeted inflation rate of around 2%. We believe the probability of the US falling into recession is receding, and even if we have a recession, our view is that it will not be a deep or long-lasting recession. Of course, GDP growth will slow and will be weak for a few more quarters, but it is increasingly likely that GDP growth will post positive rather than negative quarterly numbers over the coming year.
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ICM MONTHLY OUTLOOK - JANUARY 2024

Omne trium perfectum. This trio of Latin words, in principle, suggests that all good things come in threes. We believe it is a very apt description of where we find ourselves in the current investment cycle at the beginning of 2024. Even though 2023 was a strong year for returns across many asset classes, we believe 2024 will see a continuation of this strength, and it is more likely than not to last into 2025, making for possibly another two years of strong returns. The premise underlying this constructive view can be distilled down to a simple fact - we are now in a new cycle of easier monetary policy where all good things for risk assets tend to follow. Such a cycle takes time to run its course fully, implying that market conditions will probably be supportive for risk asset markets for all of 2024 and most, if not all, of 2025. According to Alpine Macro research, the average price gain in US stocks in the two years following a bear market is about 60%. So far, the S&P 500 index has risen 32% from its 2022 lows, which supports the view that more price gains can be expected this year.
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Weathering the Market: El Niño and La Niña

El Niño and La Niña are critical climate phenomena that significantly influence global weather patterns, impacting economies and industries worldwide. UEM has over 30% AUM exposure to South America, and as our Latam Investment Strategist, Eduardo Greca, CFA discusses, understanding these climate phenomena is crucial for anticipating the economic implications and how disruptive or beneficial they can be for some companies. Understanding the impacts of these climate phenomena and the potential for share price dislocations they can create opens up opportunities for UEM - find out more in our latest Insight.
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India

Visiting India after a COVID-induced three-year hiatus, it is remarkable to see how much has changed. While the hustle and bustle of over 20 million residents in Mumbai is a familiar sight, the ongoing development is immediately evident. New skyscrapers and apartment blocks, the appearance of two new metro lines inaugurated this year (from just one line previously), and blue hoarding envelops multiple construction sites, all a reflection of continued urbanisation and an insatiable demand for improved infrastructure. But the most significant change of all is the profound sense of optimism and determination of a nation to take its place on the world stage.
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Governance in Emerging Markets

Corporate structures in emerging markets can be characterised by concentrated ownership that can have a profound effect on the governance risk, through management entrenchment, or the risk of expropriation of minority shareholders. These risks mean that investing in emerging markets can be volatile, highlighting the need for a strong and stable corporate governance structure to guide companies through challenging political and macro environments.
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Gujarat State Petronet Limited - deep value waiting to be unlocked

Gujarat State Petronet Limited is the dominant gas pipeline operator in Gujarat, India, with a 2,700km transmission network as well as a controlling stake in distribution operator Gujarat Gas (GGAS). GGAS has a 36,000km network serving 1.9m households as well as commercial and industrial clients. The transmission grid is critical infrastructure for the State, being the principal connection to Liquefied Natural Gas terminals through which gas is imported into India. The attraction of GSPL’s core business activities is predictable regulated cash flows from transmission operations combined with commercial growth potential from distribution. However, it is evident to us that there is deep value which is being overlooked by the market due to the nature of reporting and the peculiarities of the Indian market.
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Middle East Update: Navigating Regional Risks to Find Alpha

As a follow up to the Insight published in December 2023, our Central and Eastern Europe Investment Strategist, George Velikov, has created a video covering the key points.
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APRIL 2024 FACTSHEET OVERVIEW

Hear from our Deputy Portfolio Manager, Jacqueline Broers, as she provides a market overview and a portfolio update on UEM's performance for April.
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ICM Monthly Outlook - November 2022

Most of us enjoy a nicely paced movie with a fresh storyline and a few twists and turns to keep us guessing. Observing the Federal Reserve combat inflation with its aggressive interest rate hikes and the resulting economic slowdown emerging over the last several months has been comparable to watching a below-average movie with a relatively predictable plotline and a sloth's pace.
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ICM Monthly Outlook - April 2023

A tipping point has been reached. Almost a year to the day after the Federal Reserve embarked on a new cycle of higher interest rates and tighter monetary policy, the most aggressive in US economic history, two US regional banks and a Swiss national champion bank have failed. While bond markets are pricing in one final interest hike by the Federal Reserve in May, we believe that the current cycle of interest rate hikes should already be at an end. Tightening cycles typically end with stresses starting to appear in the financial system. The Federal Reserve manages monetary policy in response to the economic indicators of inflation and unemployment, which tend to lag the business cycle, so when stresses appear, it is often a signal that they have gone far enough and, typically, too far already.
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September 2023 Factsheet Overview

Hear from our Deputy Portfolio Manager, Jonathan Groocock, as he provides a market overview and a portfolio update on UEM's performance for September.
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JANUARY 2024 FACTSHEET OVERVIEW

Hear from our Deputy Portfolio Manager, Jonathan Groocock, as he provides a market overview and a portfolio update on UEM's performance for January.
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Why El Nino & La Nina are important investment indicators for UEM

In this video, our Latam Investment Strategist Eduardo Greca has outlined the key considerations of El Nino & La Nina impacts for the region, and why these are important investment indicators for UEM
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