“When your work speaks for itself, don't interrupt.”

– Henry J Kaiser – American industrialist

AFC Funds Performance Summary

It was a good month for AFC Funds and Asian frontier markets as the volatility of April gave way to a rebound across most Asian frontier markets. All four AFC Funds reported a positive May 2025, which continues to demonstrate the ongoing re-rating taking place in our fund universe.

AFC Asia Frontier Fund Wins at the AsianInvestors Awards

I am thrilled to announce an exceptional year of recognition at the prestigious "2025 AsianInvestor Asset Management Awards" and the "Insights & Mandate Professional Investment Awards", underscoring our commitment to delivering outstanding returns in frontier markets.

Ruchir Desai & Peter de Vries Receive the "AsianInvestor Awards" at the Ritz Carlton Hong Kong

At the AsianInvestor Awards held at the Ritz-Carlton Hong Kong, our flagship AFC Asia Frontier Fund was honoured as the Best Performing Fund in Emerging Market Equity, boasting a remarkable 23.1% return in 2024, following a stellar 27.1% in 2023. Additionally, the fund earned the Highly Commended Award in Asia Ex-Japan Equity, a category that includes emerging and developed markets in Asia. These accolades reflect our disciplined investment approach and deep expertise in navigating dynamic markets, offering investors unparalleled opportunities for growth.

Marc Faber, Shareholder of Asia Frontier Capital, and publisher of the Gloom Boom & Doom report, commented on the awards:

“I am extremely happy that the AFC Asia Frontier Fund has been awarded at the "AsianInvestor Asset Management Awards 2025" as the best performing fund in the category Emerging Market Equity. This award is well deserved because the AFC Asia Frontier Fund has a deep “value strategy”, which I fully support and focuses on overlooked economies. It is great to see that at a time when international investors have been negative about emerging economies, some courageous fund managers have been able to unlock great value stocks in neglected markets.”

Peter Ryan Kane, the CEO and founder at PerK Advisory, and a member of the panel of judges, added:

"The Fund had the right mix of performance, idiosyncratic strategy, and forward looking potential to merit the award. Longstanding stewardship of a process in a challenging market universe, with detailed and specific stock selection and an investor-first mindset are hallmarks".

AFC Funds Win a Series of Awards at the "2025 Insight & Mandate Professional Investment Awards"

Further solidifying our reputation, three of our funds were celebrated at the "2025 Insights & Mandate Professional Investment Awards" at the Ritz-Carlton Shenzhen.

Peter de Vries Received Three "Insight & Mandate Awards" at the Ritz Carlton Shenzhen

The AFC Asia Frontier Fund secured the top award for Frontier Markets Equity over 5 years with an annualized return of 8.8% p.a. The AFC Iraq Fund was recognized for its extraordinary 44.5% annualized return over 3 years in the same category, showcasing its resilience and potential in high-growth markets. Meanwhile, the AFC Vietnam Fund was honoured in the ASEAN Equity category over 10 years, delivering a robust 9.8% annualized return. These awards highlight AFC’s consistent ability to identify undervalued opportunities and deliver long-term value. With a proven track record and a passion for frontier markets, we invite investors to explore how AFC’s award-winning funds can enhance their portfolios.

AFC Uzbekistan Fund Investor Day 2025

We successfully hosted our AFC Uzbekistan Fund Investor Day in Tashkent on 27^th May 2025. Our investor day was well attended by existing and prospective investors who explored with us the sights of Tashkent and met companies and companies operating in Uzbekistan.

The key takeaway from our AFC Uzbekistan Fund Investor Day was that economic activity on the ground in Uzbekistan is very robust, and there is keen interest among the investment community to access the Uzbekistan story, which we believe is a long-term structural growth play.

AFC Uzbekistan Tour Participants at the Uzbek Commodity Exchange (TSE: URTS)

AFC Asia Frontier Fund in Colombo

In line with our disciplined investment process, Ruchir Desai, Co-Fund Manager of the AFC Asia Frontier Fund, visited Colombo to meet with the fund’s portfolio holdings and with policy makers. During the visit, Ruchir moderated a panel discussion on the Sri Lankan banking sector which included an esteemed and very well-respected panel consisting of the CEOs of the three largest private commercial banks in Sri Lanka, namely, Commercial Bank of Ceylon, Hatton National Bank, and Sampath Bank. 

The panel discussion shed light on the very strong recovery the Sri Lankan economy and banking sector have made in the past year, while also discussing the promising outlook for Sri Lankan banks and the overall economy. 

Our trip to Colombo reinforced our positive long-term outlook for Sri Lanka, and the fund is well-positioned regarding its country allocation, with Sri Lanka having the second largest weight in the AFC Asia Frontier Fund.

Asia Frontier Capital’s Fund Manager Ruchir Desai Moderating a Panel Discussion in Colombo with the CEOs of Sri Lanka’s Top 3 Private Commercial Banks

June 2025 Subscription Cut-Off Date

The next cut-off date for subscriptions for our funds will be 24^th June 2025. 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 May 2025.

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 Baghdad. 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 +5.9% in May 2025 closing at an all-time high NAV of USD 2,246.01, outperforming its benchmark, the Rabee Securities RSISX USD Index (RSISUSD index), which gained 0.7% during the month. The fund gained 43.5% in 2024 on the back of a stellar performance in 2023 of +110.4%. The fund is up by 9.4% for the year versus up by 4.0% for the index. Since inception, the fund has gained 124.6% while the RSISUSD index is up by 55.9%, an outperformance of 68.7%. The annualised return since inception of the fund stands at +8.5% p.a.

However, there is more to the RSISX USD Index’s 0.7% increase than meets the eye due to the nature of the index’s market value-weighted calculation that incorporates stock price changes, but not dividends, that negatively affected the index’s monthly performance far more than in the prior years. The culprits were two humongous dividend announcements of 14.5% and 11.5% by two of its ten components, the Bank of Baghdad (BBOB) and Asiacell Communications (TASC), respectively, with a 28.6% and 10.6% index weighting at the end of April 2025. If these two dividends, as well as another component’s 0.3% dividend, were incorporated in the index’s calculations, then it would have been up 6.4% for the month.

Preceding TASC’s and BBOB’s dividend announcements, was the National Bank of Iraq (BNOI) which declared a 4.9% per share cash dividend and a 30% share dividend. The combination was effectively equivalent to a 12.3% dividend yield. The two banks’ oversized dividends follow from the outstanding earnings and book value growth enjoyed by the top banks in the country over the last two years in which the earnings two-year compounded annual growth rate (CAGR) was 203% for BNOI and 104% for BBOB (table below).

For TASC, its dividend increased by 50% year-over-year, from Iraqi Dinar (IQD) 1.0 to IQD 1.50 per share, with the dividend payout ratio increasing to 118% from 88%, reflecting the ongoing growth in the company’s earnings over the last two years with a 22% CAGR (table below), and its cash generating model that resulted in the build-up of huge reserves over the last few years. The market, while expecting a higher dividend, nevertheless received it enthusiastically on the day it went ex-dividend. According to the Iraq Stock Exchange (ISX) trading regulations, the ISX sets the stock lower by the amount of the dividend payout on the ex-dividend date; in other words, it lowered the stock’s price by IQD 1.50, yet this was completely reversed, on a high trading volume, with the stock ending at the same price that it was before it went ex-dividend. As such, effectively rallying 13% versus the ISX’s ex-dividend price adjustment. Promisingly, it increased by a further 3% again on high trading volumes by month’s close, in the process reflecting the market’s expectation for further strong earnings growth for the company, and continued high dividends.

Earnings and Book Values for Selected Companies

The backdrop to the strong growth enjoyed by the country’s top companies, as reflected in declared dividends, stems from the relative stability that the country enjoyed over the last few years; that 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 prior decades of conflict. The stock market’s upside potential in discounting these developments was the focus of a recent report, “Investing in Iraq, yet more gains to come?” by Undervalued Shares (undervalued-shares.com), itself a second report on Iraq after their initial report four years ago, with the RSISX USD index increasing by 179% between the two reports, i.e. between June 2021 and May 2025. 

The over-arching theme is that both of the two key dynamics discussed here in the past – the cumulative positive effects of the relative stability and structural banking developments – are in the early stages of their transformation of the Iraqi economy, a process that would unfold over the next few years, bringing with it high economic growth that would feed into higher corporate earnings and ultimately higher stock market returns. Nonetheless, the negative effects of lower oil prices on the economy will become a headwind, reversing the positive tailwind of the past two years. Yet, the secular positives of the economic transformation should overcome the drag from the cyclical negatives and thus continue to drive the market’s direction. 

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 11.1% by the end of May 2025, rallies further, reflecting the powerful dynamics discussed here before. 

Finally, Thomas Hugger and Ahmed Tabaqchali visited Iraq at the end of May, and embarked on a tour of the country, that included business visits to companies such as the Bank of Baghdad and Baghdad Soft Drinks, the Iraq Stock Exchange (ISX); cultural tours starting with Baghdad’s old districts (Mutanabbi Street, Mustansiriyya Madrasa, Al-Shawaka), and its modern districts; the ancient cities of Babylon, Ctesiphon, Ur; the Marshes; the meeting point of the Tigris and Euphrates rivers forming Shatt Al Arab;  and Iraq’s third largest city Basra. All of which will feature in our travel reports over the next few months as part of the 10-year anniversary of the AFC Iraq fund in June 2025.

Thomas Hugger and Ahmed Tabaqchali in Front of the Iraq Stock Exchange (ISX)

At the end of May 2025, the AFC Iraq Fund was invested in 8 names and had a cash level of 7.1%. 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 (91.7%), Norway (1.1%), and the U.K. (0.1%).

The sectors with the largest allocation of assets were financials (66.4%) and communications (16.4%). The fund's estimated weighted harmonic average trailing 12 months P/E ratio (only companies with profit) was 6.68x, the estimated weighted harmonic average P/B ratio was 1.94x, and the estimated weighted average portfolio dividend yield was 6.74%. The fund’s portfolio carbon footprint is 0.05 tons per USD 1 mn invested.

AFC Vietnam Fund - Manager Comment

The AFC Vietnam Fund returned +4.7% in May with a NAV of USD 3,215.78, bringing the 2025 return to −7.3% and return since inception to +221.6%. This month, the fund underperformed the benchmark, the Ho Chi Minh City VN Index, which gained 8.5% in USD terms. The fund’s annualised return since inception stands at +10.8% p.a. The broad diversification of the fund’s portfolio resulted in an annualised volatility of 14.81%, a Sharpe ratio of 0.60, and a low correlation of the fund versus the MSCI World Index USD of 0.49, all based on monthly observations since inception.

In May 2025, the Vietnamese stock market continued its recovery from the tariff shock on 2^nd April 2025. This rebound was largely fuelled by the strong performance of the Vingroup family of stocks—VIC, VHM, VRE, and VPL—which together represent approximately 16% of total market capitalisation and contributed about 5% to the index’s monthly gain. However, despite their recent surge, including VIC’s notable rally, many of these stocks appear significantly overvalued, particularly VPL, which trades at a P/E exceeding 1,000x. Given the AFC Vietnam Fund’s value-based investment approach, we exclude these stocks from our portfolio.

Vingroup’s Recent Stock Rally

Market Developments

The recent underperformance of the AFC Vietnam Fund versus the VN-Index can be attributed to two key factors, both stemming from market sentiment rather than underlying business fundamentals.

First, several of our export-oriented positions, such as Thien Long Group (TLG) and Dong Hai JSC (DHC), experienced aggressive selling by local individual investors since the tariff announcements, despite having minimal direct exposure to the U.S. market. TLG, Vietnam’s largest stationery company and one of our top five holdings, generates only 7% of its revenue from U.S. exports. Nevertheless, its share price was heavily impacted, now trading at an attractive valuation with a P/E of 9.7x, P/B of 1.9x, and a dividend yield of 6%.

Thien Long Group Net Profit (VND bn)

Similarly, DHC, one of our top ten holdings, generates around 20% of its revenue from supplying packaging products to seafood companies. While DHC does not export directly to the U.S., its seafood clients are specialized exporters—about 30% of their export volume is shipped to the U.S. market. This means only 6–7% of DHC’s total revenue is indirectly affected by potential U.S. tariffs. Despite delivering a strong 36% year-on-year net profit increase in Q1 2025, DHC’s share price has come under undue pressure, now trading at a highly attractive P/E of just 7.9x, reflecting significant undervaluation driven by sentiment rather than fundamentals.

Second, the VN-Index’s strong recent performance was disproportionately driven by the Vingroup group of stocks—VIC, VHM, VRE, and VPL—which collectively carry significant index weight. Our fund deliberately avoided these names due to their stretched valuations, such as VPL trading at over 1,000x earnings.

We remain confident that the current selloff in our holdings is sentiment-driven and not reflective of their solid operational performance. As investor focus shifts back to fundamentals, we expect a meaningful recovery in these undervalued positions.

Tariff Impact on Vietnam’s Export Sector Appears Overstated

The proposed 46% U.S. tariff on Vietnamese goods, currently delayed by 90 days as negotiations continue, appears to be overstated, with expectations that the final rate will be reduced to around 15–25%. The actual impact on many export businesses is likely to be minimal, particularly for companies integrated into global supply chains. For example, much of Nike’s footwear manufacturing occurs in Vietnam. A popular model like the Air Force 1, which retails for USD 115 in the U.S., costs Nike only around USD 18 to produce in Vietnam. Even at a 25% tariff, the added cost would be just USD 4.5, raising the retail price to approximately USD 119.5, or a modest 3.9% increase, which can easily be absorbed by the brand or passed on to consumers without significant disruption.

This assessment is echoed by the CEO of Thai Nguyen Garment JSC (TNG), one of our most significant export holdings, who remains confident in achieving record revenue and profit in 2025. These dynamics highlight the resilience and adaptability of Vietnam’s export businesses and the limited real-world impact of proposed tariffs on consumer-end pricing.

Trump Organization Expands Aggressively in Vietnam’s Real Estate Market

On 21^st May 2025, the Trump Organization broke ground on a USD 1.5 bn luxury development in Hung Yen’s Khoai Chau district, in partnership with Kinh Bac City Development Holding Corporation (KBC). The project spans 990 hectares along the Red River and will feature three 18-hole golf courses, a five-star hotel, luxury villas, and other amenities. Attended by Eric Trump and Prime Minister Pham Minh Chinh, the project aims to open its first golf courses by mid-2027 to coincide with the APEC Economic Leaders' Meeting, with full completion targeted for 2029.

Separately, between 19^th and 22^nd May 2025, Eric Trump and a Trump Organization delegation visited Ho Chi Minh City to explore the development of a Trump Tower in the Thu Thiem New Urban Area. In meetings with city officials, including Vice Chairman Vo Van Hoan, the early-stage skyscraper project—also involving KBC and Saigon Invest Group (SGI)—was discussed and is currently awaiting local approval. The planned 60-story tower is estimated to cost around USD 1 billion, with construction potentially starting as early as next year.

Together, these developments reflect the Trump Organization’s growing ambitions in Vietnam’s luxury real estate market, with the dual goals of driving economic growth and deepening U.S.-Vietnam business ties.

Eric Trump at the Groundbreaking Ceremony

Resolution 68: A New Era for Vietnam’s Private Sector

On 17^th May 2025, Vietnam’s Politburo passed Resolution 68-NQ/TW, marking the country’s most significant economic shift since 1975. For the first time, the private sector is officially recognized as the main engine of growth, replacing the long-standing dominance of state-owned enterprises (SOEs).

This landmark policy introduces wide-ranging reforms: tax breaks for startups, easier access to land and credit, streamlined licensing and bankruptcy procedures, and generous incentives for innovation and digital transformation. Private companies can now allocate up to 20% of taxable income to R&D, with 200% tax deductions, while public procurement contracts and industrial land are prioritized for SMEs and startups.

The resolution aims to convert 1–1.25 mn business households into formal enterprises by 2030, boost GDP growth to 7–8% annually, and attract USD 3.5–4 bn in foreign inflows. It also targets the development of 20 large private corporations by 2030, following models like Samsung and Hyundai.

We believe resolution 68 is critical for helping Vietnam escape the middle-income trap and achieve developed nation status by 2045. We view this as a generational turning point—a bold vote of confidence in Vietnamese entrepreneurs and a major catalyst for long-term growth.

KRX Launch Paves the Way for Emerging Market Upgrade

Vietnam’s adoption of the KRX trading system on 5^th May 2025 marks a significant step toward an emerging market upgrade by FTSE Russell and MSCI. The new system resolves past congestion issues and enables millions of orders daily across HoSE, HNX, and VSDC. It supports international standards such as T+0 trading, short selling, and T+1 settlement, with a central counterparty clearing mechanism improving security and efficiency. These technical upgrades boost liquidity and increase transparency, and are expected to attract significant foreign inflows, strengthening Vietnam’s potential upgrade to emerging market status by October 2025.

At the end of May 2025, the fund’s largest positions were: Lam Dong Minerals and Building Materials (8.4%) – a building material supplier, Agriculture Bank Insurance (7.5%) – an insurance company, Thien Long Group (6.5%) – a manufacturer of office supplies, TNG Investment and Trading JSC (5.9%) – an apparel manufacturer, and Dong Hai JSC of Bentre (5.2%) – a packaging manufacturing company.

The portfolio was invested in 37 names and held 10.2% in cash. The sectors with the largest allocation of assets were consumer (34.5%) and financials (29.4%). The fund's estimated weighted harmonic average trailing 12 months P/E ratio (only companies with profit) was 9.93x, the estimated weighted harmonic average P/B ratio was 1.24x, and the estimated weighted average portfolio dividend yield was 4.35%. The fund’s portfolio carbon footprint is 1.52 tons per USD 1 mn invested.

 AFC Asia Frontier Fund - Manager Comment

The AFC Asia Frontier Fund (AAFF) USD A-shares returned +3.6% in May 2025 with an all-time high NAV of USD 1,956.25. The fund underperformed the benchmark MSCI Frontier Markets Asia Net Total Return USD Index (+9.3%), the MSCI Frontier Markets Net Total Return USD Index (+6.6%), and the MSCI World Net Total Return USD Index (+5.9%). Year to date, the fund has delivered a +2.3% return, underperforming the benchmark, which went up by 7.4%. The performance of the AFC Asia Frontier Fund A-shares since inception on 30^th March 2012 now stands at +95.6% versus the benchmark, which is down by 15.2% during the same period, showing an outperformance of +110.8% since inception. The fund’s annualised performance since inception is +5.2%. 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 0.49, all based on monthly observations since inception.

After the volatility in April, the AFC Asia Frontier Fund made a strong comeback in May with a broad-based rally across our portfolio holdings as well as across our fund universe. Gains in May were led by Iraq, Sri Lanka, Mongolia, Vietnam, Pakistan, Papua New Guinea, and Timor-Leste. The only major negative contributor this month was Bangladesh.

The Central Bank of Sri Lanka continues with its pragmatic monetary policy and reduced its benchmark interest rate by 25 basis points on the back of low inflation. The overall stable macroeconomic position in Sri Lanka is now positively impacting consumer spending as demand for various consumer goods and services makes a comeback.

Hemas Holdings, one of the leading consumer and healthcare conglomerates in Sri Lanka and the AFC Asia Frontier Fund’s third largest position in Sri Lanka, is benefitting from the return of consumer demand, with its quarterly results showing improving revenue and net profit growth. In 1Q25, Hemas Holdings’ net profits grew by 64% while the stock continues to trade very attractively at a one-year forward P/E ratio of 9.3x despite the +42% rally in its stock price this year.

Hemas Holdings in Sri Lanka Outperformed the Colombo All Share Index Year to Date in 2025

The AFC Asia Frontier Fund’s thematic positions have also delivered powerful returns for the fund so far in 2025. The fund holds gold miners in Cambodia, Mongolia, and Papua New Guinea, each of them either listed in Australia or Canada. With gold prices witnessing a rally this year, the gold mining stocks the fund holds have also rallied significantly and well ahead of the gold price as some of these companies are already producing gold and showing excellent profitability on the back of high gold prices.

The AFC Asia Frontier Fund’s Gold Mining Stocks Have Done Well in 2025

The best-performing indexes in the AAFF universe in May were Vietnam (+8.7%) and Pakistan (+7.6%). The poorest-performing markets were Bangladesh (−5.7%) and Kazakhstan (−1.1%). The top-performing portfolio stocks this month were a gold producer from Papua New Guinea (+100.0%), a Manganese miner from Timor-Leste (+46.7%), a Myanmar conglomerate (+26.1%), a gold miner from Mongolia (+23.8%), and Cambodian gold mining company (+14.5%).

In May, the fund added to existing holdings in Bangladesh, Pakistan and Sri Lanka.

At the end of May 2025, the portfolio was invested in 57 companies, 2 funds, and held 3.5% in cash. The two biggest stock positions were a cement producer in Pakistan (3.9%) and a bank in Kazakhstan (3.7%). The countries with the largest asset allocation were Pakistan (18.1%), Sri Lanka (12.6%), and Iraq (10.6%). The sectors with the largest allocation of assets were financials (32.9%) and consumer goods (20.7%). The fund's estimated weighted harmonic average trailing 12 months P/E ratio (only companies with profit) was 6.20x, the estimated weighted harmonic average P/B ratio was 1.26x, and the estimated weighted average portfolio dividend yield was 3.76%. The fund’s portfolio carbon footprint is 0.44 tons per USD 1 mn invested.

AFC Uzbekistan Fund - Manager Comment

The AFC Uzbekistan Fund Class F shares returned +0.7% in May 2025 with a NAV of USD 1,243.34, bringing the return since inception (29^th March 2019) to +24.3%.

AFC Uzbekistan Investor Tour

While news was scant on the capital markets and broader economy during May, on 27^th May 2025, a group of 20 of us descended on Tashkent for the fourth AFC Uzbekistan Tour where we met Georgia’s TBC bank, with operations in Uzbekistan now driving the company’s growth, and the Uzbek Commodity Exchange (TSE: URTS).

There was significant discussion around the economy, its large and growing population, and the country’s fiscal buffer being its immense gold reserves from Navoi Gold, a company comparable to Barrick Mining (market cap: USD 33 billion) or Newmont Corporation (market cap USD 58 billion), which is slated for an IPO in London by the first quarter of 2026. We estimate Navoi’s market cap at IPO to be in the USD 20 billion range, with significant upside due to multiple undeveloped gold assets.

For years, we have suggested that gold could be a key asset for Uzbekistan and other economies in an increasingly fractured world. Uzbekistan is fortunate to hold several hundred million ounces of gold reserves, with its flagship Muruntau gold mine being the second-largest open-pit gold producer in the world in 2024. Gold and foreign direct investment (FDI) have further boosted Uzbekistan’s foreign exchange reserves, which rose to USD 49.3 billion in May, up from USD 47.9 billion in April, now representing approximately 50% of the GDP.

Further discussions focused on the April announcement that Franklin Templeton would manage Uzbekistan’s National Investment Fund (UzNIF), a portfolio of state-owned enterprises slated for IPO in London next year. In early May, the Uzbek Commodity Exchange (TSE: URTS), which is the second-largest holding in the AFC Uzbekistan Fund at around 14%, became the first company to officially announce that 40% of its equity, owned by the Uzbek government, was transferred to the UzNIF.

The UzNIF is valued at approximately USD 1.7 billion, and many of its assets, including hydroelectric power stations and financial services, appear to be undervalued. However, most of these portfolio companies heavily rely on the state for their survival and are therefore exceptionally inefficient. Nevertheless, price is everything, and cheaply acquiring a set of assets that are not well-managed but have potential for improvement can be a sound investment.

Squeezing out inefficiencies from these state-owned enterprises (SOEs) should not be overly challenging if the government allows Franklin Templeton the necessary authority. For instance, Uzmetkombinat (TSE: UZMK), Uzbekistan’s largest steel producer, underwent a corporate transformation starting in 2018 that resulted in a net income increase of 1,387% by 2022 when global steel prices peaked, and a further 349% growth through 2024. Earnings are expected to rise into 2026 as the company opens its new hot-rolled coil plant this year, which will double production.

It will be interesting to observe how Franklin Templeton manages the UzNIF and the extent of their influence on the portfolio companies, in addition to restructuring the board of directors.

Wrapping up the AFC Uzbekistan Tour, we concluded with a group photo after our meeting at URTS.

AFC Uzbekistan Tour Participants Visiting the Uzbek Commodity Exchange (TSE: URTS)

At the end of May 2025, the fund was invested in 23 names and held 11.9% in cash. The portfolio was allocated to Uzbekistan (88.0%) and Kyrgyzstan (0.1%). The sectors with the largest allocation of assets were financials (43.0%) and materials (22.5%). The fund's estimated weighted harmonic average trailing 12 months P/E ratio (only companies with profit) was 3.52x, the estimated weighted harmonic average P/B ratio was 0.61x, and the estimated weighted average portfolio dividend yield was 2.63%.

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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