Monthly Updates, News, Sustainable


The fund fell 0.4% in September, compared to MSCI FMxGCC Net TR (SEK), which rose 0.4%. Negative contributions accrued from Egypt (0.8%) in connection with the temporary political unrest (read more in our Africa section), in Sri Lanka (0.8%) which rebounded after a few months of good performance and Bangladesh (0.4%) which fell sharply at the beginning of the month and then recovered. Positive contributions accrued from our allocation and stock picking in Pakistan (+1%) and stock picking in Nigeria (0.7%). During the month, the fund increased its exposure to Pakistan by about 3%. About 2/3 of the increase was due to increases in existing holdings, while 1/3 was made up of a basket with five smaller companies where each represents a substantial long-term upside in an improved market climate. The purchases in Pakistan were financed with divestments mainly in Egypt but also in Sri Lanka and Vietnam.


MSCI FMxGCC Net TR (SEK) rose 0.4%, compared to MSCI EM Net TR (SEK) which rose 2.0%. Among our markets, Pakistan (+8.1%) and Nigeria (+5.1%) performed most positively, while Bangladesh (-2%) and Sri Lanka (-2%) performed most negatively.

September was an eventful month. Pakistan recovered in the face of falling interest rates and due to a general feeling in the market that the worst pessimism probably has passed. Nigeria’s progress can be described similarly. No significant positive news worth mentioning, but rather sellers’ fatigue caused the market to bounce. Bangladesh had a weak start but recovered in the later part of the month after the state’s lawsuit against the largest company Grameenphone now looks to be solved amicably. Sri Lanka had a tough time after the questioning of the supposed presidential candidate of the Rajapaksas sphere Gota Rajapaksa’s citizenship. On October 4th, the appeal court announced that they are rejecting the objections, which should be welcomed by the market in October.

We have previously mentioned that the climate in our core markets has become somewhat more constructive since mid-July, and that feeling remains. Investors remain cautious and we note from time to time outflow-related sales flows in our markets. However, we have also noticed an increase in curiosity and value hunting. The unusually low valuations combined with the fact that most of the markets in recent years have gone through fairly significant economic crises results in an improving risk-reward. What finally triggers a more substantial rise remains to be seen.

ESG Engagement

Five Pakistani companies were added to the fund in September, 2019.

Century Paper & Board Mills Limited (Century), established in 1984, is part of the Lakson Group of Companies in Pakistan. The company manufactures paper, paperboard and packaging products for various sectors including soaps and detergents, food and beverages, dairy products, ice cream, and home appliances. While paper production is traditionally water-intensive, Century is committed to increasing its water efficiency by saving water and enhancing the quality of treated wastewater to maximize recycling. Thus, the company has collaborated with the Pakistan Council of Research in Water Resources to develop injection wells for underground water replenishment through rainwater. In addition, Century started installing solar panels in 2018 and will enhance the capacity in 2019.

The General Tyre and Rubber Company of Pakistan Limited (GTYR) is a tyre manufacturing company based in Karachi and founded in 1963. GTR’s capacity meets approximately one-third of the country’s demand and covers almost 85% of the tyre sizes demand in Pakistan. As part of the company’s philanthropic activities, GTR regularly donates to the Wakf-e-Kuli Khan Trust which engages in promoting education for underprivileged people. GTR has been awarded ISO 9001-2015, ISO 14001-2015 and OHSAS 18001-2007.

Shezan International Limited (Shezan), established in 1964, is a manufacturer and supplier of fruits and vegetable related juices and products. The company offers a wide range of products including beverages, juices, sauces, jams and jellies, and pickles of high quality and hygiene. With regard to sustainability policies, Shezan is committed to focus on environmental protection, energy conservation, optimizing resource utilization, and ensuring the safety and health protection of its employees. Other social strategies entail community investment, welfare schemes and also establishing a policy regarding the hiring of disabled persons.

Shifa International Hospitals Limited (Shifa) was incorporated in 1987 and is engaged in establishing and running medical centers and hospitals in Pakistan. From a 36-bed hospital with 4 clinical services, Shifa has grown into a 550-bed quaternary care regional referral center offering 42 specialties with state-of-the-art facilities. The company’s environmental measures focus on energy conservation, drinking water quality, treatment of wastewater and hazardous waste, and management of air emissions. In terms of social policies, Shifa has a robust staff health and safety program; thus, Shifa has undertaken a variety of CSR activities in the areas of health and nutrition.

EFU Life Assurance Ltd (EFU Life) started its operations in 1992 as the first private sector life insurance company. As a pioneer in the life insurance business, EFU Life has introduced unit-linked products, critical illness and education planning products, inflation protection benefits and pension plans. Every year, the company conducts an in-house energy conservation audit in order to keep a close watch of consumption. EFU Life strives to be an equal opportunity employer and puts emphasis on employees’ occupational health and safety issues; thus, the company organizes various sports activities for all employees.

No companies were divested from the fund this month.

DISCLAIMER:DISCLAIMER: Capital invested in a fund may either increase or decrease in value and it is not certain that you be able to recover all of your investment. Historical return is no guarantee of future return. The state of the origin of the Fund is Sweden. This document may only be distributed in or from Switzerland to qualified investors within the meaning of Art. 10 Para. 3,3bis and 3ter CISA. The representative in Switzerland is OpenFunds Investment Services AG, Seefeldstrasse 35, 8008 Zurich, whilst the Paying Agent is Società Bancaria Ticinese SA, Piazza Collegiata 3, 6501 Bellinzona, Switzerland. The Basic documents of the fund as well as the annual report may be obtained free of charge at the registered office of the Swiss Representative.

Gotabaya Rajapaksa – the future president of Sri Lanka (question mark).

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