Fact sheets September
In September, the broad Frontier Markets index fell -1.4%. The price development of the TCM Frontier funds showed a nice outperformance compared to the various indices. The increase was largest on the stock exchanges in Egypt (12.5%), Pakistan (12.1%) and Kazakhstan (+4.3%). The biggest decliners were the markets in Vietnam (-8.44%) and Kenya (-3.1%).
Egypt has announced that it will hold early presidential elections as early as December 2023 as the country faces economic headwinds due to high inflation. Citizens will go to the polls on December 10, where it was first thought that the elections would not take place until 2024. President El-Sisi, who was appointed in 2014, has not yet said whether he wants to run again, but there is a good chance he will participate. Egypt borrowed $3 billion from the IMF last year to support the economy. But the IMF wants Egypt to take certain actions. This could well be the reason for the early elections. El-Sisi is probably keen to get the elections over with before making painful economic decisions, such as devaluing the currency.
The Pakistani rupee strengthened 5.8% against the dollar in September after Pakistani authorities cracked down on currency smuggling. The announcement of elections in 2024 also created a positive mood on the stock market.
In September, sentiment in Vietnam was under pressure. Investors expressed concerns about the declining value of the Vietnamese Dong (VND). Sentiment deteriorated on fears of a policy change following the withdrawal of planned government bond issuance by the State Bank of Vietnam. Selling pressure on the stock markets increased at the end of the month as investors unwound their speculative positions in preparation for their quarterly reporting to the regulator. Economically, things looked good: Vietnam's GDP growth in the third quarter was 5.3%. The services sector was the main driver, recording annual growth of 6.2%. The growth was also largely attributed to the return of international tourists following a relaxation of visa policies.
The outlook looks good for Vietnam's stock market, supported by indicators such as rising export orders and government spending, which are expected to drive economic recovery in the coming quarters. Moreover, the development of declining interest rates will continue to attract money flows into the stock market. The sometimes sharp fluctuations on the stock markets pose short-term challenges, but also create opportunities for investors.
More news about Vietnam, Africa and the Global Frontier fund can be found in the latest fact sheets of the equity funds:
TCM Global Frontier High Dividend Equity
TCM Vietnam High Dividend Equity
TCM Africa High Dividend Equity