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AAA-rated EM equity expert eyes Romanian riches

AAA-rated EM equity expert eyes Romanian riches

A 2016 report published by the World Economic Forum named Romania as one of Europe’s fastest-growing countries, with growth expected to hit 4.2% this year, beating last year’s 3.6%.

However, Charlemagne’s Dominic Bokor-Ingram believes the country is often ignored by investors due to its previous ‘basket case’ status.

‘Because of the country’s history and the fact that it’s an illiquid market, it tends to fall off the radar with investors, even those focused on frontier markets,’ the EM specialist said.

Bokor-Ingram currently has 10% of his Magna New Frontiers fund allocated to Romania and said his biggest investments in the country include banks and utilities.

‘Romania’s banks went through a very tough time up until a few years ago, but we were quick to realise that economic growth was turning around in the banking sector – probably faster than any other sector, so it’s one of our best bank performers over the last couple of years.’

Bokor-Ingram is also plugging into the country’s utility sector, which he said had been blighted by lack of investment and corruption, but is now powering up.

‘The Romanians have been progressing on both fronts, so you now have very cheap electrical facilities, gas pipeline companies trading with 11-12% dividend yields and further growth.

‘There aren’t that many long-term investments that can better this. It’s not as exciting as a healthcare company growing at 25% a year, but earning 12% on your dividends plus 7 or 8% capital growth a year is a pretty decent return these days,’ he said.

These comments originally appeared in the October edition of Citywire Selector magazine.

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