Post on 22-Aug-2020
For Professional Investors and Advisers Only
April 2018
Saudi Arabia – An Emerging Opportunity
RWC Emerging & Frontier MarketsStrategy Update Q1
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The Team
John Malloy and James Johnstone co-manage the RWC emerging and frontier markets strategies. Al Qureiyeh is the analyst responsible for the MENA region and covers the healthcare and healthcare providers sectors. The team is composed of a further 15 analysts, economists and strategists based in Miami and Singapore, many of whom have worked together for over twenty years. The team joined RWC Partners in 2015 and now manages c. $5.5bn for its clients.
Emerging and frontier markets represent the fastest growing countries in the world. The RWC team believes the continued growth in these markets represents opportunities across a range of industries.
The highly experienced and dedicated team takes an index-agnostic, opportunistic approach which allows it to explore investment opportunities that are often off the beaten track.
The team provides an overview of the first quarter of 2018 before exploring investment opportunities within Saudi Arabia.
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RWC Emerging & Frontier Markets
Review of Q1 2018
Emerging Market Equities and Frontier Market Equities appreciated during the quarter. A combination of protectionist rhetoric and fears concerning US Interest Rate hikes led to a spike in volatility and a global sell-off in equities. Emerging and Frontier Markets outperformed Developed Markets during the quarter and the environment continues to be conducive for the asset class. The MSCI Emerging Markets Index appreciated 1.3%, the MSCI Frontier Markets rose 5.0% and Developed Markets (MSCI AC World Net Total Return) fell 1.6%. The RWC Emerging Markets Fund was up 0.2% and the RWC Frontier Markets Equity Fund rallied 6.7%. Global growth remains robust, inflation and unemployment are contained and macroeconomic data is encouraging. Oil rose 5.1% during the quarter and we continue to see a promising blend of strong demand and declining inventory data amid muted US shale production. Copper gave back a small portion of its 2017 gains but we believe increased demand and constrained supply will support the price over the long term.
Brazilian oil company, Petrobras, was a significant contributor to the performance of the RWC Emerging Market Equity Fund. The share price rose 37.4% during the quarter, as the company reported good earnings results. The company reported BRL 44 billion of free cash flow for 2017 and showed declines in operating costs and net debt. Improving fundamentals combined with further asset sales and cost cutting should continue to support the share price and the company trades at a 10% discount to global peers on an EV/EBITDA basis. Vietnam and Saudi Arabia also performed well during the quarter. Steel company, Hoa Phat Group, rose 29.3% during the first quarter bolstered by strong earnings results. Revenue and net profit reached a record high of VND 46.8 trillion and VND 8 trillion respectively (+38% and +21% year-on-year). The outlook for the company remains strong
given its competitive advantages, the commencement of the new galvanized steel project of 0.4m tons/year in addition to the start of operations at the Dung Quat Integrated Steel rolling mill. Saudi Arabia’s Tadawul All Share Index rose 8.9% during the quarter as positive momentum built, culminating in index provider FTSE Russell including the country in its emerging markets index. The country’s largest bank by assets, National Commercial Bank, appreciated 21.5% in dollar terms.
Vietnam was a significant contributor to the RWC Frontier Markets Equity Fund, both relatively and absolutely. Ho Chi Minh Development Bank continues to perform well, rising 42.7% over the quarter, as investors take confidence from its targeted expansion within the retail and SME segments. Vietnam Prosperity Bank also rose markedly (+58.3%) and both companies should continue to benefit from a young and growing population, combined with the potential for increased penetration of consumer finance loans. Egypt was also a contributor to performance. Sentiment remains positive as the country’s macroeconomic environment becomes increasingly favourable for equity investors. Foreign exchange reserves are increasing, inflation is moderating and the central bank has reduced its policy rate from 18.75% to 16.75%. Property developer, Palm Hills, rose 30.8% during the quarter due to the prospect of higher margins from price increases. In Kazakhstan, Halyk Savings Banks rose 39.7% as it benefits from the country’s encouraging macroeconomic conditions of stable to higher commodity prices. Kenya also rebounded with banks, Equity and KCB, rallying 38.9% and 13.8% respectively. The country boasts greater political stability after the elections in 2017 and we believe the proposed modifications to the rate cap law will likely boost net interest margins.
RWC does not offer investment advice nor this should this be construed as a recommendation to purchase or sell any security. Past performance is not a guide to the future. The price of investments and the income from them may fall as well as rise and investors may not get back the full amount invested.
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Saudi Arabia: An Emerging Opportunity
Introduction
His numerous reforms are spread across the private and public sectors in an attempt to utilise the Kingdom’s burgeoning workforce to develop a thriving, diversified economy. Significant catalysts such as the recent inclusion of the country in the FTSE Russell Emerging Markets Index, potential MSCI reclassification later this year, stable oil prices and an expansionary fiscal budget suggest a positive outlook for equities in the near to medium term.
Saudi Arabia is one of the world’s largest exporters of oil and the fortunes of the economy have historically been dependent on the commodity. An oil price boom from 2003 to 2014 fuelled a doubling of the country’s GDP, a 75% increase in household income and an increase from $18 billion to $720 billion in foreign exchange reserves. In the face of a changing global energy market, the Kingdom is currently undergoing a significant transformation led by Crown Prince Mohammed Bin Salman.
Vision 2030
The document released by the Saudi Government is a high level statement of its transformational plans for the Kingdom. Whilst Vision 2030 contains numerous pillars, goals and statistical promises, the key message is simple: progress from a government-driven economy to one that is privately oriented. This will require substantial financial support as the private sector only contributes roughly 40% of GDP compared to a global average of 60%. The Government plans to
double GDP, increase government revenue and create jobs for both men and women. The primary vehicle that will be used to support this transformation is the Public Investment Fund (PIF). The privatisation of the State Oil Company, Saudi Aramco, and the other 146 state-owned-enterprises1 over the course of the next decade will hopefully boost PIF assets to roughly $2 trillion from $230 billion today, making it the largest Sovereign Wealth Fund in the world.
FIGURE 1: Crown Prince Mohammed Bin Salman is the driving force behind Vision 2030
Source: Vision 2030, CNN
1 MEED Report – 27th March 2016 ‘Saudi Arabia has identified about 146 state-owned enterprises that could be privatised…’
RWC does not offer investment advice nor this should this be construed as a recommendation to purchase or sell any security.
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FIGURE 2: By 2030 the Government plans to double GDP...
FIGURE 4: …create jobs for men and women
FIGURE 3: ...increase Government revenue
FIGURE 5: …and build the largest SWF globally
Oil Sector
Real GDP by Sector 2003-2030
2003 2013
400
$bill
ion
800
2030
1,600
Public Sector Private Sector
0
200
400
600
800
1,000
1,200
1,400
1,600
1,800
152
304
1,344
80176
128
37684164
Foreign Workers
2003 2013
Employment of Saudi Nationals 2003-2030
3.0
Pop
ulat
ion
(mn)
4.6
2030
10.8
Saudi Women Saudi Men
0
2
4
6
8
10
12
14
16
2.5
4.2
7.5
3.6
3.9
0.8
6.20.4
3.2
Non-Oil
2003 2013
Government Revenue by Source 2003-2030
79
$bi
llion
308
2030
460
Oil
0
50
100
150
200
250
300
350
400
450
500
138
322277
62
17 31$
billi
on
Norway
China
998900
828
Sovereign Wealth Funds
524494 457 441
359320 295
210
1,637
UAEAbu D.
Kuwait
SaudiSAMA
ChinaHK
Singapore
ChinaSAFE
Qatar
China N.Sec
UAEDubai
SaudiPIF
0
200
400
600
800
1,000
1,200
1,400
1,600
1,800
2,000
Assets PIF 2030 estimate
230
Source: Mckinsey, RWC, Bloomberg 2003-2030E
Source: Mckinsey, RWC, Bloomberg 2003-2030E
Source: Mckinsey, RWC, Bloomberg 2003-2030E
Source: SWF Institute, Morgan Stanley, RWC, Bloomberg 2018-2030E
RWC does not offer investment advice nor this should this be construed as a recommendation to purchase or sell any security.
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The Economy
Saudi’s growth dynamics are poised for change in 2018 due to the Government’s announcement of an expansionary budget of almost SAR 800 billion ($215bn); a year-on-year increase of 5%. Consequently, the IMF has upgraded its 2018 and 2019 GDP growth forecasts to 1.6% and 2.2% from under 1% previously. Despite the Kingdom’s long-
term goal to diversify away from oil, the share of oil in GDP, exports and budget revenues is still high at 43%, 74% and 63% respectively. Growth in oil production driven by refinery expansions should support growth in the near to medium term. Public Debt to GDP is low at 17% of GDP, compared to an average of 47% in emerging markets.
Real Non-Oil Growth Real GDP Growth
2015
Saudi Real GDP Growth (%)
2016 2017 2019E2018E-2.0%
-1.0%
0.0%
1.0%
2.0%
3.0%
4.0%
5.0%
Oil Production Real-Oil GDP
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018E-15%
-10%
-5%
0%
5%
10%
15%
20%Oil Production vs. Oil GDP
Source: RWC, IMF, EFG Hermes, Bloomberg 2015-2019E Source: RWC, Jadwa Investment, Bloomberg 2008-2018E
FIGURE 6: GDP Growth is set to rebound…
FIGURE 7: …aided by rising oil production
RWC does not offer investment advice nor this should this be construed as a recommendation to purchase or sell any security.
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The Population
Saudi Arabia boasts a young and growing population with great potential. 32 million people are residents in the Kingdom making it by far the largest of the six GCC Gulf Arab States. 44% of the population is under 24 and by 2030 this demographic bulge could bring 5 million working-age Saudis to the labour market. Like other countries in the region, Saudi has a large expatriate workforce. Recent reforms such as the introduction of VAT, increases in
energy prices and expat levies could hurt consumption in the near term as expats depart. However, long-term fiscal sustainability is essential in order to diversify government revenue away from the dividends of state-owned enterprises and boost private sector job creation. The low participation of women in the labour force (19%) shows considerable potential if there is sustainable private sector job creation.
0-14y 15-24y 25-54y
Saudi Population (% of total)
55-64y 65y+0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
50%
Russia US OECD Korea
Labour Force Participation (%)
Mexico SouthAfrica
Turkey SaudiArabia
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
Total Women Men
Source: RWC, Haver, Bloomberg, Indexmundi Source: RWC, Haver, Bloomberg, Morgan Stanley
FIGURE 8: Saudi’s population is young and growing
FIGURE 9: Low participation shows potential
RWC does not offer investment advice nor this should this be construed as a recommendation to purchase or sell any security.
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economy is dependent on oil, the performance of the Tadawul has been uncorrelated to the oil price from 2012 to 2017. The market has lagged the MSCI Emerging Markets Index since January 2016 by 34% and we expect this trend to reverse over the course of the next 12 months. It trades at 12.7x 2019 earnings, slightly above the MSCI Emerging Markets Index but below the historical average premium of 13% above the index (2008-2017).
Qatar Turkey UAE Chile Mexico RussiaMalaysia Indonesia SouthAfrica
TaiwanSaudiArabia
$bi
llion
0
200
400
600
800
1,000
1,200
1,400
2012 2013 2014
Cor
rela
tion
2015 2016 2017-0.2
-0.0
0.2
0.4
0.6
0.8
1.0TASI Correlation with Oil Price
Qatar TurkeyUAE Chile Mexico RussiaMalaysia Indonesia
Average Daily Volume
SouthAfrica
TaiwanSaudiArabia
$m
illio
n
0
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
12,000
11,000
10,000
9,000
8,000
7,000
6,000
5,000
4,0002013 2014 2015 2016 2017
1,200
1,300
1,400
1,100
1,000
900
800
700
600
500
400
Tadawul vs. MSCI EM
Source: RWC, Bloomberg as at 16/03/18
Source: RWC, Bloomberg, Morgan Stanley 31/12/17
Source: RWC, Bloomberg as at 16/03/18
Source: RWC, Bloomberg as at 16/03/18
The Equity Market
The Saudi equity market is currently $475 billion and trades roughly $1 billion per day on the Tadawul, the only stock exchange in Saudi Arabia. It is also broadly diversified across many sectors. There are currently 178 companies listed on the stock exchange and Saudi officials aim to increase the number of listings to 250 over the coming years. Foreign institutional investors own only 1.5% of the market and have historically accounted for only +/-1% of total trading volumes. While the
FIGURE 10: Large Market Capitalisation
FIGURE 12: Low correlation to oil prices
FIGURE 11: Good Liquidity
FIGURE 13: Lags the MSCI EM Index
RWC does not offer investment advice nor this should this be construed as a recommendation to purchase or sell any security.
Market Capitalisation
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Markets Index. Foreign institutional ownership is now 1.5% which is a fraction of regional peers (21% in UAE and 9% in Qatar) and the country represents only 0.05% of global equity portfolios. As MSCI recently noted, ‘major enhancements to the Saudi Arabian equity market’ have taken place over the previous year such as the implementation of the T+2 settlement cycle, the introduction of stock lending / short selling and the liberalisation of the QFI (Qualified Foreign Investor) programme rules.
Saudi Arabian Investment Opportunities
Vision 2030 highlights numerous sectors that have significant investment potential. Petrochemicals, Retail & Trade, Tourism, Healthcare, Finance, Mining & Metals and Construction should all benefit from Crown
Prince Mohammed Bin Salman’s reforms. The RWC team has considerable experience investing in the country and we outline some of our holdings below:
Source: Arabian Business
FTSE / MSCI Emerging Markets Index Inclusion
Index provider, FTSE Russell, announced the reclassification of Saudi Arabia to Emerging Markets status at the end of March and MSCI will likely follow suit in June. Estimates suggest that this will lead to around $13.0 billion in passive flows (ex. Aramco) but active flows could be considerably greater over the long term, as the capital markets will continue to be more attractive to foreign investors. The country will be 2.7% of the FTSE Emerging Market All Cap index and will likely constitute 2.4% of the MSCI Emerging
FIGURE 14: The Tadawul Stock Exchange
RWC does not offer investment advice nor this should this be construed as a recommendation to purchase or sell any security.
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Banking and Insurance
Saudi Arabia has a consolidated and well-capitalised banking sector which benefits from a high share of non-interest bearing liabilities. Sector loan penetration is below regional peers at 56% of GDP. Loan growth has been subdued but is set to rebound in 2018/2019 due to improving macroeconomic conditions. The Real Estate market presents an exciting opportunity
FIGURE 15: Loan growth is set to rebound
FIGURE 17: Motor penetration set to increase
as residential mortgages account for only 7% of total sector lending and are just 5% of GDP. Furthermore the Government has targeted to increase household formation and ownership. The lifting of the driving ban on women will boost the insurance sector through a significant increase in the number of policies in the motor segment.
FIGURE 16: Mortgage market is underpenetrated
1993 1996 1999 2002 2005 2008 2011 2014 2017 2020E
Loan Growth (YoY%)
-10%
-5%
0%
5%
10%
15%
20%
25%
30%
35%
40%
2018 2019 2020
Motor Penetration Excluding Women
Motor Penetration Including Women
2021 2022 2023 2024 202520%
30%
40%
50%
60%
70%
80%
90%Motor Penetration Levels (2018 - 2025e)
Residential Mortgages as % of Total Lending
0%
2%
4%
6%
8%
10%
12%
14%
16%
Alawwal Alinma Albilad BSF SIBNCBSaudi
RiyadBank
Al Jazira Al Rahji SABB Samba ANBMortgageSector
Source: RWC, Bloomberg, Morgan Stanley 1993-2020E
Source: RWC, Bloomberg, HSBC 2018-2025E
Source: RWC, Bloomberg as at 31/12/17
RWC does not offer investment advice nor this should this be construed as a recommendation to purchase or sell any security.
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National Commercial Bank
National Commercial Bank (NCB) is Saudi Arabia’s largest bank by assets and is the country’s dominant corporate lender. The SAR currency peg means that the Saudi Interbank Rate (SIBOR) is highly correlated to United States LIBOR which will benefit Net Interest Margins. The bank is best-placed to benefit from
higher market rates, as corporate lending is shorter duration than retail and priced at variable rates on the SIBOR curve. The stock is trading at 1.7x Price to Book (2019) and we still see c.20% potential upside in the next 9 months.
Religious Tourism
As highlighted in Vision 2030, Mecca and Medina draw millions of religious tourists from around the world every year, particularly during the five-day Hajj. Vision 2030 outlines the Kingdom’s goal to attract 15 million tourists a year by 2020 and 30 million tourists by
2030. This will be accomplished by improving the quality of services offered to Umrah visitors. The onerous visa process which strictly limited the number of non-GCC nationals allowed to visit the country has now been removed paving the way for future growth.
FIGURE 18: NCB has the largest asset base
FIGURE 20: Religious tourists set to more than double by 2030
FIGURE 19: NIMs will benefit from higher rates
NCB 19%
Al Rahji 16%
Samba 10%
Riyad 10%
BSf 9%
SABB 8%
ANB 8%
Alinma 5%
Alawwal 5%SIB 4%Al Jazira 4%
Albilad 2%
Asset Base Market Share (%)
2013 2014 2015 2016 2017E 2018E 2019E 2020E 2030E
Umrah Visitors
Peo
ple
(mill
ions
)
0
5
10
15
20
25
30
35
2011 2012 2013 2014 2015 2016 2017 2018E 2019E 2020E1.5%
2.0%
2.5%
3.0%
3.5%
4.0%
4.5%NCB Net Interest Margin
Source: National Commercial Bank, RWC, Bloomberg 31/12/17
Source: Vision 2030, RWC, Bloomberg, HSBC 2013-2030E
Source: National Commercial Bank, RWC, Bloomberg 31/12/17
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Al Tayyar
Al Tayyar is the largest domestic travel agency in Saudi Arabia. The company has 29% market share in the Saudi Air Travel market; four times that of the second player. We believe the company will be a large beneficiary of the country’s demographic trends in addition to religious tourism. Al Tayyar’s increased investment in the online travel space through leading
local mobile applications, Tajawal and Mosafer will likely drive online revenue to SAR 3.7bn ($986mn) by 2020 according to our estimates. The company also owns and operates hotels in Mecca to take advantage of the growth in Umrah visitors. It trades on 6.2x Price to Earnings (2019) and we see significant upside to the stock.
2015 2016 2017 2018E 2019E 2020E
Net Booking ($ million) LHS
Al Tayyar
Market Share of Overall Travel Market in MENA RHSMarket Share of Online Travel Market in MENA RHS
0
200
400
600
800
1,000
1,200
Net
Boo
king
($ m
illio
n)
0.0%
1.0%
2.0%
3.0%
4.0%
5.0%
Source: RWC, Bloomberg, HSBC 2015-2020E
FIGURE 21: Online market has considerable room to grow
RWC does not offer investment advice nor this should this be construed as a recommendation to purchase or sell any security.
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RWC does not offer investment advice nor this should this be construed as a recommendation to purchase or sell any security.
Consumer and Retail
While short-term consumption numbers have been hurt by recent subsidy reforms and expat departures, we see the consumer and retail segment as a long-term beneficiary of the country’s austerity reversal. The Government’s implementation of direct benefit transfers will likely offset the impact of subsidy
reforms and Expatriates transfer 87% of their salaries outside of Saudi Arabia. Further integration of women in the economy amid private sector reform we believe will boost household disposable incomes which will lead to evolving consumption patterns favouring modern retail.
FIGURE 22: Government will support the Saudi consumer
FIGURE 23: Expats transfer 87% of salaries outside Saudi Arabia
Expat Saudi nationals
Remittances Local Consumption
0%
20%
40%
60%
80%
100%
120%
87%
13%
100%
Consumption in Saudi Arabia
Source: RWC, Bloomberg, Haver, HSBC 2018E Source: Euromonitor, OECD, RWC, HSBC 2017
MonthlyAllowance
50
32
20
-23
-9 -9
-22
CitizenAccount
VAT ExciseTax
Utility Fuel NetGains
-30
-20
-10
0
10
20
30
40
50
60Saudi Consumer Income 2018E
SA
R b
illio
n
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RWC does not offer investment advice nor this should this be construed as a recommendation to purchase or sell any security.
Savola
Savola is one of the largest conglomerates in Saudi Arabia with operations focused on food production, retailing and investments within related sectors. The company is in the midst of a turnaround due to underperforming operations at its grocery retail business, Panda. Significant catalysts such as the closure of non-performing stores, inventory
FIGURE 24: Savola is attractively valued
reductions and the implementation of the loyalty program (1.2 million subscriptions) have been completed. The stock is attractively valued, as its $5.8bn market capitalisation is less than its stakes in its listed associates, implying no value for the group’s core operations. We see 34% upside to the current share price.
FIGURE 25: Panda set to recover
Savola Current
$ m
illio
n
Almarai Herfy Other RWC Est. Valueof Savola
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
9,000
10,000
Market Capitalisation
2010 2011 2012 2013 2014 2015 2016 2017 2018E 2019E
Operating Margin LHS
Panda – Sales Growth and EBIT Margin
Sales Growth RHS
-6.0%
-4.0%
-2.0%
0.0%
2.0%
4.0%
6.0%
-15.0%
-10.0%
-5.0%
0.0%
5.0%
10.0%
15.0%
Source: RWC, Bloomberg, 28/02/17 Source: RWC, Bloomberg, 2010-2019E
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RWC Emerging & Frontier Markets 15
RWC does not offer investment advice nor this should this be construed as a recommendation to purchase or sell any security.
Crown Prince is to succeed in transforming the Kingdom, the Saudi population will have to adapt accordingly. The shift is both structural and cultural; future prosperity will largely depend on the ability of the population to innovate, create jobs and improve their skills. The equity market is a function of this transformation and will likely offer up more investment opportunities as the country and population embrace economic and structural change.
Conclusion
The proposed reforms of Crown Prince Mohammed Bin Salman show that Saudi Arabia is on the cusp of significant change. Both John Malloy and James Johnstone recently visited the country and were encouraged by the level of positivity that Mohammed Bin Salman’s reform agenda has generated. Rice Hadley Gates have also emphasised their confidence surrounding the country’s reversal of austerity. However, if the
Saudi Arabia
Source: World Maps
Key Facts
Geography• 2.15 Square Kilometres• 83% Urbanisation• Capital City: Riyadh• Time Zone: GMT +3
People• Population: 32 million• Literacy: 87%• Religions: 85-90% Sunni Muslim,
10-15% Shia Muslim
History• Founded in 1932 by King Abdulaziz ibn Abdul
Rahman Al Saud (“Ibn Saud”)• Islamic Centre: “The Land of the Two Holy Mosques”
Macroeconomics• Nominal GDP: $750 billion (2018E)• GDP per Capita: $23,255• CPI average (% yoy): 3.5% (2018E)• USD/SAR: 3.75 peg• Policy Rate: 2.00 (2018E)
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Certain assumptions and forward looking statements may have been made either for modelling purposes, to simplify the presentation and/or calculation of any projections or estimates contained herein and RWC does not represent that that any such assumptions or statements will reflect actual future events or that all assumptions have been considered or stated.Forward-looking statements are inherently uncertain, and changing factors such as those affecting the markets generally, or those affecting particular industries or issuers, may cause results to differ from those discussed. Accordingly, there can be no assurance that estimated returns or projections will be realised or that actual returns or performance results will not materially differ from those estimated herein. Some of the information contained in this document may be aggregated data of Transactions executed by RWC that has been compiled so as not to identify the underlying Transactions of any particular customer.The information transmitted is intended only for the person or entity to which it has been given and may contain confidential and/or privileged material. In accepting receipt of the information transmitted you agree that you and/or your affiliates, partners, directors, officers and employees, as applicable, will keep all information strictly confidential. Any review, retransmission, dissemination or other use of, or taking of any action in reliance upon, this information is prohibited. The information contained herein is confidential and is intended for the exclusive use of the intended recipient(s) to which this document has been provided. Any distribution or reproduction of this document is not authorised and is prohibited without the express written consent of RWC or any of its affiliates.Changes in rates of exchange may cause the value of such investments to fluctuate. An investor may not be able to get back the amount invested and the loss on realisation may be very high and could result in a substantial or complete loss of the investment. In addition, an investor who realises their investment in a RWC-managed fund after a short period may not realise the amount originally invested as a result of charges made on the issue and/or redemption of such investment. The value of such interests for the purposes of purchases may differ from their value for the purpose of redemptions. No representations or warranties of any kind are intended or should be inferred with respect to the economic return from, or the tax consequences of, an investment in a RWC-managed fund. Current tax levels and reliefs may change. Depending on individual circumstances, this may affect investment returns. Nothing in this document constitutes advice on the merits of buying or selling a particular investment. This document expresses no views as to the suitability or appropriateness of the fund or any other investments described herein to the individual circumstances of any recipient.AIFMD and Distribution in the European Economic Area (“EEA”).The Alternative Fund Managers Directive (Directive 2011/61/EU) (“AIFMD”) is a regulatory regime which came into full effect in the EEA on 22 July 2014. RWC Asset Management LLP is an Alternative Investment Fund Manager (an “AIFM”) to certain funds managed by it (each an “AIF”). The AIFM is required to make available to investors certain prescribed information prior to their investment in an AIF. The majority of the prescribed information is contained in the latest Offering Document of the AIF. The remainder of the prescribed information is contained in the relevant AIF’s annual report and accounts. All of the information is provided in accordance with the AIFMD.In relation to each member state of the EEA (each a “Member State”), this document may only be distributed and shares in a RWC fund (“Shares”) may only be offered and placed to the extent that (a) the relevant RWC fund is permitted to be marketed to professional investors in accordance with the AIFMD (as implemented into the local law/regulation of the relevant Member State); or (b) this document may otherwise be lawfully distributed and the Shares may lawfully offered or placed in that Member State (including at the initiative of the investor).Information Required for Distribution of Foreign Collective Investment Schemes to Qualified Investors in Switzerland.The representative and paying agent of the RWC-managed funds in Switzerland (the “Representative in Switzerland”) is Société Générale, Paris, Zurich Branch, Talacker 50, P.O. Box 5070, CH-8021 Zurich. In respect of the units of the RWC-managed funds distributed in Switzerland, the place of performance and jurisdiction is at the registered office of the Representative in Switzerland.
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Please contact us if you have any questions or would like to discuss any of our strategies.E invest@rwcpartners.com | W www.rwcpartners.com
Unless expressed otherwise, all opinions within this document are those of the RWC Emerging & Frontier Markets investment team.
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