“Your attitude, not your aptitude, will determine your altitude.”

– Hilary Hinton "Zig" Ziglar was an American author, salesman, and motivational speaker.

AFC Funds Performance Summary

AFC Asia Frontier Fund Achieves a New All-Time High NAV

In our 2024 Outlook Report, we noted that we would not be surprised if the AFC Asia Frontier Fund achieves a new all-time high NAV by the end of 2024. This prediction has now materialized, reflecting our confidence in the performance outlook for Asian frontier markets. Over the past year, performance has been strong across the board, led by key markets such as Iraq, Kazakhstan, Mongolia, Pakistan, Sri Lanka, and Vietnam.

We anticipate further gains in 2025 for the AFC Asia Frontier Fund given our continued conviction in the economic turnaround that is taking place in countries like Bangladesh, Pakistan, and Sri Lanka. More details on our perspective for 2025 will be shared in our “AFC Asia Frontier Fund Review and Outlook Report”, which will be released in the third week of December 2024.

Despite the AFC Asia Frontier Fund achieving a new all-time high NAV, its P/E ratio of just 7.1x remains well below its historical average and is close to its all-time low (see graph below). Returns over the past two years have predominantly been led by earnings, macro-economic recoveries, and lower interest rates within our universe. We believe that the next leg of the ongoing re-rating in Asian frontier markets will be fuelled by an expansion of valuation multiples as investors factor in positive triggers in the form of significantly improved macro-economic and political stability.

AFC Asia Frontier Fund NAV at a New All-Time High -
But its P/E Ratio Trades Close to its All-Time Low

BarclayHedge Awards

We are proud to announce that our work has been recognized with two awards from BarclayHedge. The AFC Asia Frontier Fund was ranked in the Top 10 funds in the categories of “Emerging Markets – Asia” and “Emerging Markets Equity – Asia.” In October 2024, the fund achieved a return of +2.6%. This performance highlights its low correlation with other markets, as the MSCI Emerging Markets Net Total Return Index declined by 4.4% and the MSCI World Net Total Return Index fell by 2.0% during the same period. These awards serve as validation for the investment thesis of the AFC Asia Frontier Fund, emphasizing its effectiveness as a diversification tool for equity investors.

Changes in The AFC Fund Boards

I am pleased to share some important updates regarding the composition of the Board of Directors of Asia Frontier Capital Ltd, and our funds, AFC Umbrella Fund, and AFC Umbrella Fund (non-US). These changes represent another step forward in positioning our company for continued growth and success.

After years of dedicated services, our director and good friend Henry Looser will be stepping down from the board of Asia Frontier Capital Ltd, AFC Umbrella Fund, and AFC Umbrella Fund (non-US). Henry’s wisdom, guidance, and commitment have been instrumental in our journey, and we are immensely grateful for his contributions. We wish Henry all the best as he embarks on his next chapter.

As we bid farewell to Henry, we are thrilled to welcome three exceptional individuals to our Boards: Roland Jossi, Aleksandr Kostjukevitš, and Giselle Lee will become new directors of the boards of AFC Umbrella Fund and AFC Umbrella Fund (non-US).

Aleksandr Kostjukevitš, an Estonian citizen, is a seasoned legal and compliance professional with nearly 20 years of experience. From his leadership at WISE Plc, a leading European global money transfer platform, to his role as Group Chief Compliance Officer at Olympic Entertainment Group, an Estonia-based sports betting and gaming service provider, Aleksandr’s expertise in navigating regulatory landscapes will be invaluable for AFC in this ever-changing legal environment.

Giselle Lee, a Hong Kong citizen, brings over two decades of experience in asset management, with a strong track record of success in business development and strategic advisory roles across Asia. Her deep knowledge of the industry and ability to drive results will add tremendous value to our strategic initiatives.

Roland Jossi, currently our deputy CEO, joins the board with over 40 years of global financial expertise, having held senior leadership roles at UBS and Credit Suisse. His vast experience across asset management, private banking, and insurance in Europe and Asia positions him to bring unparalleled insights to the board.

These appointments reflect our unwavering commitment to strong governance and forward-thinking leadership. I am confident that the diverse expertise of Aleksandr, Giselle, and Roland will guide us toward continued growth, and I am thrilled to be working together with such an experienced board with such diverse professional backgrounds. I wish all three new directors a great start at AFC.

December 2024 Subscription Cut-Off Date

The next cut-off date for subscriptions for our funds will be 23^rd December 2024. If you would like to know more about the subscription process, please get in touch with us at This email address is being protected from spambots. You need JavaScript enabled to view it.

Please find below the managers’ comments on each of our four funds for November 2024.

AFC in the Press

Upcoming AFC Travel

Thomas Hugger, Ruchir Desai, and Peter de Vries are based in Hong Kong, while Andreas Vogelsanger is based in Bangkok, Vicente Nguyen in Ho Chi Minh City, Scott Osheroff in Tashkent, and Ahmed Tabaqchali in London and Iraq. If you have an interest in meeting with our team at their homeports or during their travels, please contact Peter de Vries at This email address is being protected from spambots. You need JavaScript enabled to view it.

AFC Travel

AFC Iraq Fund - Manager Comment

The AFC Iraq Fund Class D shares returned +2.8% in November 2024 with a NAV of USD 2,031.95, slightly underperforming its benchmark, the Rabee Securities RSISX USD Index (RSISUSD index), which gained 2.9% during the month. The fund is up 42.1% year to date versus 41.7% for the index. Since inception, the fund has gained 103.2% while the RSISUSD index is up by 46.8%, an outperformance of 56.4%. The annualized return since inception of the fund stands at +7.8% p.a.

The market’s powerful momentum over the last two months continued into the second week of the month when it was up 7.3%, before profit-taking cut that to an increase of 2.9% at month end, suggesting that the market will likely consolidate these gains or pull-back somewhat. However, its technical picture continues to be positive, and the likely consolidation or pullback should be within its multi-month uptrend as it has done over the prior months (chart below).

Rabee Securities U.S. Dollar Equity Index

Underpinning the market’s multi-month rally has been the strong net profit and shareholder equity growth of the top companies in the market, both quarter-over-quarter and year-over-year, which continued with the release of 3^rd quarter of 2024 (Q3/24) results. Given that these companies operate in different sectors, each with its own dynamics, and each company within the same sector has its own particular dynamics, the tables below aim to capture these differences by looking at both quarterly and yearly growth. They compare Q3/24 to Q2/24, Q3/24 to Q3/23 to capture quarterly growth both sequentially and year-over-year, as well as trailing 12 months (TTM) ending in Q3/24 to TTM ending in Q3/23 to capture full-year growth.

Net Profit and Shareholder Equity Growth for Selected Companies

The background to the healthy growth enjoyed by these companies is the relative stability that the country has enjoyed over the last few years, which has provided a stable and predictable macroeconomic framework for businesses and individuals to operate in and to plan for capital investments on a scale not seen in the last prior decades of conflict. That, in turn, should be sustained by the population’s pent-up demand for goods and services to catch up with the rest of the world. Supporting this growth are liquidity injections into the economy by the government’s expansionary three-year budget for 2023-25 that resulted in an estimated real non-oil GDP growth in 2023 of 6.0%, followed by an estimated 3.5% in 2024, which is projected to grow further still by 3.3% in 2025 (IMF). For the banking sector, this has been further fuelled by the significant fundamental developments that promise to accelerate the adoption of banking and bring about a transformation of the sector and its role in the economy, which in turn should promote the growth of other companies. These dynamics, as well as the market’s recent performance and outlook, were discussed in the AFC Iraq Fund section during Asia Frontier Capital’s quarterly webinar on 29^th October 2024 providing its regular “Asian Frontier Markets Update”. 

We continue to believe that the upside opportunity for the AFC Iraq Fund will come about as the RSISX USD Index, having surpassed its 2014 peak by 4.6%, rallies further reflecting the powerful dynamics discussed here. However, risks remain given Iraq’s recent history of conflict and extreme leverage to volatile oil prices, as well as the risk that a widening of the current Middle East conflict will not be contained and evolve to destabilise the region – even though the temporary ceasefire in Lebanon lowered the likelihood of further destabilisation, risks remain that this will not hold or that other negative developments take place.

At the end of November 2024, the AFC Iraq Fund was invested in 8 names and had a cash level of 7.4%. The fund invests in both local and foreign-listed companies that have the majority of their business activities in Iraq. The markets with the largest asset allocation were Iraq (91.4%), Norway (1.0%), and the U.K. (0.2%).

The sectors with the largest allocation of assets were financials (73.7%) and consumer staples (8.8%). The fund's estimated weighted harmonic average trailing 12 months P/E ratio (only companies with profit) was 6.48x, the estimated weighted harmonic average P/B ratio was 1.83x, and the estimated weighted average portfolio dividend yield was 3.45%. The fund’s portfolio carbon footprint is 0.07 tons per USD 1 mn invested.

 AFC Asia Frontier Fund - Manager Comment

The AFC Asia Frontier Fund (AAFF) USD A-shares returned +1.3% in November 2024 with a NAV of USD 1,798.39. The fund outperformed the benchmark MSCI Frontier Markets Asia Net Total Return USD Index (+0.2%) and the MSCI Frontier Markets Net Total Return USD Index (−0.8%) and underperformed the MSCI World Net Total Return USD Index (+4.6%), and. Year-to-date, the fund shows a +15.8% return, outperforming the benchmark, which went up by 1.4%. The performance of the AFC Asia Frontier Fund A-shares since inception on 30^th March 2012 now stands at +79.8% versus the benchmark, which is down by 22.6% during the same period, showing an outperformance of +102.5% since inception. The fund’s annualized performance since inception is +4.7%. The broad diversification of the fund’s portfolio has resulted in lower risk with an annualised volatility of 10.4% and a correlation of the fund versus the MSCI World Net Total Return USD Index of 0.50, all based on monthly observations since inception.

Despite the macroeconomic challenges faced by Asian frontier markets in recent years, our active top-down and bottom-up country and stock selection strategies have yielded robust results. This proactive approach involves a focused and disciplined effort to be on the ground in our markets, along with regular meetings with portfolio companies and policymakers.

Even after achieving a new all-time high NAV, the AFC Asia Frontier Fund continues to trade at an attractive P/E ratio of 7.1x, close to its all-time low.

AFC Asia Frontier Fund NAV at a New All-Time High –
P/E Ratio Close to All-Time Low!

November 2024's performance was primarily driven by gains in Pakistan, Sri Lanka, Iraq, Bangladesh, and Georgia, while Mongolia and Uzbekistan were the key negative contributors.

A notable event in November 2024 was the parliamentary elections in Sri Lanka. The current President, Mr. Anura Dissanayake, representing the National People’s Power (NPP) coalition, was expected to win a majority. However, the NPP secured a much larger win than anticipated, winning 159 out of 225 seats, thus obtaining a supermajority. 

This decisive electoral victory for the NPP is a significant positive for Sri Lanka. It not only enhances macroeconomic stability but also bolsters political stability, further supporting the country's recovery narrative. With this win, Mr. Anura Dissanayake and his team are now in a much stronger position to implement effective policymaking.

The Colombo All Share Index has had a Strong Run Since the Beginning of 2023 on an Ongoing Economic Recovery

The positive outcome of the NPP's victory was quickly recognized by the International Monetary Fund (IMF), which passed its third review of Sri Lanka’s loan program. Additionally, there has been a successful renegotiation of the terms of Sri Lanka’s international sovereign bonds. On 27^th November 2024, the Central Bank of Sri Lanka also reduced its benchmark interest rate by a further 75 basis points, which will continue to boost corporate profitability and overall economic momentum.

Although the Colombo All Share Index has seen a strong rally since early 2023, we believe that political stability—coupled with an ongoing economic recovery driven by tourism and domestic consumption—can lead to a more significant re-rating of Sri Lanka's valuations. This combination of positive political will and stronger economic fundamentals has been absent for the past five years.

We anticipate further gains in the Colombo All Share Index in 2025, driven by both multiple expansion and a recovery in earnings.

Political Stability is a Big Positive for the Ongoing Economic Momentum in Sri Lanka – This Should Help Re-Rate Valuations to Pre-Crisis Levels seen between 2014-2017

The KSE-100 Index in Pakistan also achieved a milestone by crossing 100,000 for the first time ever. This reflects the ongoing macroeconomic stability and an earnings recovery in Pakistan, supported by declining interest rates and compelling valuations.

We expect that Pakistan is going to maintain its upward trajectory in 2025, fueled by the continuing interest rate cut cycle, a recovering earnings landscape, and a stable macroeconomic environment marked by lower current account deficits—issues that have historically plagued the economy and stock market.

We Expect the KSE-100 Index in Pakistan to Make Further Gains in 2025 on the back of Lower Interest Rates, An Earnings Recovery, and a Lower Current Account Deficit

The best-performing indexes in the AAFF universe in November were Pakistan (+13.6%) and Laos (+8.7%). The poorest-performing markets were Vietnam (−1.1%) and Cambodia (-0.8%). The top-performing portfolio stocks this month were all from Pakistan: a consumer healthcare company (+33.5%), an oral care company (+18.7%), a cement producer (+15.4%), a stock exchange operator (+15.3%), and a technology company (+13.1%).

In November 2024, the fund made its first investment in Timor-Leste by purchasing a manganese producer listed on the Australian Stock Exchange since the company’s manganese asset could potentially have a large quantity of high-grade manganese which will be faster to ship to key markets like China and India thanks to its ideal location. The fund also invested in a gold exploration company in Papua New Guinea. During the month, the fund added to existing positions in Pakistan and Mongolia and exited a mall operator and a stock brokerage company in Vietnam and two construction companies in Mongolia. The fund also reduced existing positions in Mongolia.

At the end of November 2024, the portfolio was invested in 64 companies, 2 funds, and held 6.8% in cash. The two biggest stock positions were an information technology company in Vietnam (4.7%) and a fintech company in Kazakhstan (3.5%). The countries with the largest asset allocation were Pakistan (16.0%), Vietnam (11.4%), and Iraq (10.4%). The sectors with the largest allocation of assets were financials (30.6%) and consumer goods (21.1%). The fund's estimated weighted harmonic average trailing 12 months P/E ratio (only companies with profit) was 7.13x, the estimated weighted harmonic average P/B ratio was 1.34x, and the estimated weighted average portfolio dividend yield was 3.53%. The fund’s portfolio carbon footprint is 0.51 tons per USD 1 mn invested.

AFC Vietnam Fund - Manager Comment

The AFC Vietnam Fund returned +0.4% in November with a NAV of USD 3,331.04, bringing the year-to-date return to +5.9% and return since inception to +233.1%. This month, the fund outperformed the benchmark, the Ho Chi Minh City VN Index, which lost 1.4% in November 2024 and has gained 6.0% year to date in USD terms. The fund’s annualized return since inception stands at +11.6% p.a. The broad diversification of the fund’s portfolio resulted in an annualised volatility of 14.66%, a Sharpe ratio of 0.67, and a low correlation of the fund versus the MSCI World Index USD of 0.51, all based on monthly observations since inception.

Market Developments

One factor contributing to the decline of the VN-Index in November was the speech by Mrs. Hong, Governor of the State Bank of Vietnam, during the Congress Meeting on 11^th November 2024. She mentioned that the State Bank had submitted documents to the government to support borrowers affected by Typhoon Yagi. Although she did not reference Circular 02—which allows commercial banks to maintain current levels of non-performing loans (NPL)—rumours quickly spread on social media that the State Bank would not extend Circular 02. This misinformation alarmed local individual investors, leading to a sell-off in bank stocks that significantly dragged down the market in the days following her speech.

However, there is no indication that the State Bank plans to discontinue Circular 02. From our perspective, this was merely a short-term overreaction by local investors. We expect the market to recover soon.

Trump Presidency Impacts on Vietnam

The victory of Donald Trump in November 2024 to become the 47^th U.S. President is expected to bring both opportunities and challenges to Vietnam. Trump’s presidency 2.0, much like his first term, will significantly impact the global economy, and Vietnam has started preparing strategies to adapt to this new environment. Below are key points regarding the potential impacts:

Positive Impacts:

• Production Shift to Vietnam

During Trump’s first term, higher tariffs on Chinese goods drove many companies to relocate production to Vietnam. This trend resulted in substantial foreign direct investment (FDI) inflows, particularly in sectors like furniture, which saw Vietnam surpass China as the largest furniture exporter to the U.S. in 2019. 

This production shift is likely to continue, as not all capacity moving out of China can return to the U.S., and Vietnam remains a key alternative manufacturing hub. Even if Vietnamese goods face moderate tariffs of 20%, this rate is still far more favourable than the “potential” 60% tariffs imposed on Chinese products.

• Strong Export Growth

Vietnam’s exports to the U.S. surged during Trump’s first presidency, supported by his favourable relations with the country and the tariffs imposed on China. Vietnam captured a significant share of U.S. imports, benefiting from near-shoring trends and its ability to integrate seamlessly into global supply chains.

The recently upgraded Comprehensive Strategic Partnership (September 2023) reinforces Vietnam's strong trade relations with the U.S. Even if tariffs are increased, they are expected to function as a negotiation tool rather than a punitive measure. Furthermore, Vietnam’s extensive network of free trade agreements, including its deal with the EU, has enabled it to gain import market share not just with the U.S. but also with other major global markets.

• Boost in FDI, Particularly in AI, Technology and R&D

The wave of FDI into Vietnam has been transformative, with major global players like Foxconn, LG, Lego, and BYD not only setting up manufacturing operations but also establishing R&D centres. This highlights one of Vietnam’s underappreciated advantages: its affordable yet high-quality engineering talent.

Additionally, Vietnam’s growing prominence in global supply chains has attracted cutting-edge investments:

• SpaceX recently announced a $1.5 billion investment in Vietnam for its Starlink satellite service
• Samsung is expanding its semiconductor R&D efforts in Ho Chi Minh City
• The Trump Organization has also committed to a $1.5 billion investment, reflecting the strong alignment of U.S. interests with Vietnam’s growing economy

Vietnam’s well-established deep-sea ports, including three of the world’s 50 busiest ports, have further increased its competitiveness. These ports and new investments, such as Maersk’s bonded warehouse near Hanoi, enable more extensive global shipping routes to operate directly from Vietnam, reducing dependency on reloading in ports like Singapore or Shanghai.

Such developments mark a potential "golden era" for Vietnam in technology, AI, and advanced manufacturing, contributing to long-term economic growth and higher export revenues.

Negative Impacts:

• Higher Tariffs on Vietnamese Goods

If Trump’s campaign promises are implemented, tariffs of up to 20% on Vietnamese goods could slow export growth to the U.S., negatively impacting Vietnam’s overall economic performance. While these tariffs are unlikely to be as severe as those imposed on China, they could still pose challenges for Vietnamese exporters.

• Protectionist Policies

Trump’s protectionist agenda, including higher global tariffs, could disrupt supply chains and increase costs for Vietnamese exporters. This poses risks to Vietnam’s competitive edge in key export sectors such as textiles, electronics, and furniture.

• Pressure to Purchase U.S. Products

Vietnam may face increased pressure to buy U.S. goods, such as energy products and defense equipment. This could lead to higher trade costs and strain Vietnam’s fiscal budget.

Conclusion

Despite potential challenges such as higher tariffs and protectionist demands, Vietnam is uniquely positioned to thrive under Trump’s second presidency. The combination of near-shoring trends, Vietnam’s expanding free trade network, and increased investments in high-tech sectors solidifies its status as a critical player in the realignment of global supply chains. With major investments in technology and infrastructure, Vietnam is poised to emerge as a key hub for trade, innovation, and economic growth.

Vietnam's USD 67 bn North-South High-Speed Railway Project
On Wednesday, 20^th November 2024, the National Assembly deputies were presented with reports detailing the investment policy for Vietnam’s ambitious North-South high-speed railway project, valued at approximately VND 1.7 quadrillion (USD 67.34 bn). This landmark infrastructure endeavour will feature a dual-track railway with a gauge of 1,435 mm, a load capacity of 22.5 tons per axle, electrification, and a design speed of 350 km/h. The mainline will span approximately 1,541 km and include five key stations.

Timeline and Execution Plan
According to the Minister of Transport, preparation and approval of the feasibility study and front-end engineering design will be completed between 2025 and 2026. Key activities such as land clearance, contractor bidding, and project groundbreaking are scheduled for 2027, with the ambitious goal of completing the entire railway by 2035.

Economic Impact and Strategic Significance
The project is massive in scale, representing 16.5% of Vietnam’s GDP and requiring an annual public investment of approximately 2% over the next eight years. As highlighted in our previous reports, Vietnam's aggressive public investment strategy will play a critical role in driving the country’s long-term economic growth.

Opportunities for Growth
This high-speed railway project, along with other large-scale infrastructure investments are expected to create strong momentum for economic development across various sectors. Several companies are well-positioned to benefit from this trend, particularly those involved in construction, engineering, material supply, and technology.

Vietnam’s commitment to infrastructure expansion underlines its strategic focus on building a modern and efficient transportation system to support sustainable growth, enhance connectivity, and strengthen its regional competitiveness.

Vietnam's Future High-Speed Railway Using Chat GPT

Economy 

Vietnam’s economy displayed resilience and strong recovery momentum in October 2024, achieving significant milestones across key sectors:

• Record High Exports: Export value reached USD 299.6 bn, the highest in 10 months, driven by robust demand for electronics, textiles, and agricultural products.
• FDI Disbursement Peak: Foreign direct investment disbursement reached USD 17.3 bn, reflecting Vietnam’s sustained appeal as a global manufacturing and business hub.
• Tourism Surge: As of October 2024, Vietnam welcomed 14.1m international visitors year-to-date, led by arrivals from China, South Korea, and Europe. Remarkably, the first 10 months of 2024 exceeded pre-COVID levels recorded during the same period in 2019.

These achievements underscore Vietnam’s robust economic performance amid global uncertainties.

At the end of November 2024, the fund’s largest positions were: Lam Dong Minerals and Building Materials (7.9%) – a building material supplier, Thien Long Group (7.1%) – a manufacturer of office supplies, Agriculture Bank Insurance (6.7%) – an insurance company, Minh Phu Seafood Corp (6.2%) – a seafood company, and Hang Xanh Motors Service (5.6%) – a Mercedes-Benz dealership.

The portfolio was invested in 38 names and held 3.9% in cash. The sectors with the largest allocation of assets were consumer (42.9%) and financials (23.6%). The fund's estimated weighted harmonic average trailing 12 months P/E ratio (only companies with profit) was 11.59x, the estimated weighted harmonic average P/B ratio was 1.62x, and the estimated weighted average portfolio dividend yield was 4.18%. The fund’s portfolio carbon footprint is 1.61 tons per USD 1 mn invested.

AFC Uzbekistan Fund - Manager Comment

The AFC Uzbekistan Fund Class F shares returned −4.0% in November 2024 with a NAV of USD 1,275.25, bringing the return since inception (29^th March 2019) to +27.5%, while the return for the year stands at −26.7%. On an annualised basis, the fund has returned +4.4% p.a.

November saw the conclusion of the government’s sell down of a minority stake in the Uzbek Commodity Exchange (TSE: URTS) which was oversubscribed. Further, the Tashkent Stock Exchange finally has equity and bond prices quoted on Bloomberg, both significant steps in the right direction.

Uzbek Commodity Exchange - URTS

November saw the closing of the secondary offering of the Uzbek Commodity Exchange (TSE: URTS) which was 108% oversubscribed (total demand being ~USD 3.35 million), leading many investors to receive only 85% of their requested allocations. This was the most successful offering of this size since the country re-opened in 2016. While in the grand scheme of things this deal was peanut-sized, for Uzbekistan it’s a big deal and shows from just how low of a base the market is growing from. Now we only need a handful of other such deals to be as successful in order to increase retail investor participation and really kickstart things in the market.

Following URTS’s secondary offering, the company also increased its capitalization via a distribution of 4 shares to existing investors for every one share held, in order to comply with new regulatory requirements around minimum paid up capital requirements for commodities exchange businesses. 

Factoring in the increased share count, on 26^th November 2024 the share price adjusted from UZS 15,399 to UZS 3,079. The share price ended November at 3,498, 13.6% higher from the price adjustment. Further, in the final four days of trading 281,914 shares traded for roughly USD 75,000. While this is seemingly insignificant, we are aware of several investors looking to acquire in some cases up to 1 million shares. This was evidenced by seeing bids in the market for 200,000 shares on several days but unsuccessfully filled, which likely means there is risk to the upside in the stock as these investors get more aggressive in building their positions if the market doesn’t come to them. Such investor interest should only increase over time, as we have been harping on, and the below news should add further fuel to this trend over the coming months.

Bloomberg Goes Live!

During November, after what has been a six-year long wait since we first introduced the Tashkent Stock Exchange to Bloomberg in 2018, stock and bond quotations and financial data are now hosted on Bloomberg with a one-hour delay. This is big news, as institutional investors have been asking for years when quotes will be on Bloomberg as it is much easier than digging into the stock exchange and regulatory websites. 

The regulator of Uzbekistan’s capital markets discussed that this achievement is a step in the right direction for increased liquidity in the bid to attract new investors, expanding the base of international market participants, and accelerating integration into global financial markets. Uzbekistan has a long way to go, but later this decade the government hopes to have the Tashkent Stock Exchange included in the MSCI Frontier Markets Index. If they can pick up the pace of capital markets development from here, that’s not an impossibility. But first we need to see integration with international custodians, a dramatic increase in investor participation, a step change in local market liquidity, and new IPO prospects. 

The next step will be the integration with Clearstream, which is coming as the CEO of the Tashkent Stock Exchange, George Paresishvili has this among his KPI’s in the pipeline to cross off. Hopefully 2025 is the year we finally see the long-awaited step-change in market dynamics, which would dramatically alter, in a positive manner, the performance of the AFC Uzbekistan Fund which has been negatively impacted by the slow but steady drift lower across the market over the past two years. The fund remains concentrated in the blue-chip companies of Uzbekistan which are best positioned to benefit from the aforementioned continued market developments.

At the end of November 2024, the fund was invested in 24 names and held 7.9% cash. The portfolio was allocated to Uzbekistan (92.0%) and Kyrgyzstan (0.1%). The sectors with the largest allocation of assets were financials (44.5%) and materials (26.4%). The fund's estimated weighted harmonic average trailing 12 months P/E ratio (only companies with profit) was 4.09x, the estimated weighted harmonic average P/B ratio was 0.65x, and the estimated weighted average portfolio dividend yield was 3.05%.

I hope you have enjoyed reading this newsletter. If you would like any further information, please get in touch with me or my colleagues at This email address is being protected from spambots. You need JavaScript enabled to view it.

With kind regards,

Thomas Hugger
CEO & Fund Manager

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