Apr 22 2013

MENA region offers growth opportunities at a premium to emerging markets

Baring MENA Fund has returned 20.8% since its launch in March 2010
Saudi Arabia and United Arab Emirates offer most attractive opportunities in region
MENA economies are forecast to enjoy growth rates at a premium to developed and emerging neighbours, believes Barings

Dubai, 22 April 2013 - Many economies in the Middle East and North Africa (MENA) are enjoying healthy rates of growth, at a premium to developed or even emerging neighbours, and are offering good opportunities for investors, according to Baring Asset Management (Barings), the international investment firm.

Governments across the MENA region are investing in infrastructure and a youthful middle class is emerging with a taste for consumer goods of all kinds, creating new opportunities for companies. Moreover, since many of these companies are not widely followed by investment analysts, Barings believes this is an environment in which it is possible for active managers to add significant value by identifying mis-priced investment opportunities in regional equity markets.

The Baring MENA Fund has just celebrated its third anniversary, and over this period it has performed strongly, returning a cumulative 20.8%1 in US dollar terms since inception, significantly outperforming the benchmark which declined by 0.9% in US dollar terms2.

Dr Ghadir Abu Leil-Cooper, Manager of the Baring MENA Fund, comments: "In the three years since we launched the Baring MENA Fund, March 2010 being the official launch date, we have seen significant changes. Protests in Tunisia that year marked the beginning of the Arab Spring, which led to changes of Government not just in Tunisia but Egypt, Libya and the Yemen too.

"While this may seem like a challenging investment environment, by navigating carefully we have managed to generate significant outperformance of the benchmark index."

The Fund invests across the region, with major holdings in the United Arab Emirates (UAE) (22%), Qatar (19%), Turkey (18%), Saudi Arabia (16.4%) and Kuwait (15%). Oman currently accounts for 6% of the Fund.

Barings believes the most attractive investment opportunities can currently be found in Saudi Arabia and the UAE. In Saudi Arabia, the asset manager has identified a number of stock selection opportunities in the Telecoms, Healthcare, Consumer and Infrastructure sectors. These are all sectors where the Government has announced its intention to increase spending in order to help support growth over the medium and long-term.

In the case of the UAE, the economy continues to rebound strongly, driven in particular by sectors such as Tourism and Real Estate. These areas have recently seen strong inflows from overseas markets due to recent unrest in countries such as Egypt, and this has been generally encouraging for companies linked to these sectors.

Elsewhere, Barings also maintains off-benchmark exposure to Turkey, where a fast-growing and increasingly affluent population supports the long-term outlook for Financials and Consumer-related sectors. It is more cautious on the near-term outlook for the Egyptian market as the uncertain political environment continues to impact the domestic economy.

1Source: All performance: Barings, Morningstar, as at 31st March 2013, in US dollar terms. Fund performance figures relate to the Class A US dollar accumulation share type and are shown net of fees and charges, in US dollar terms on a NAV per share basis, with gross income reinvested. Reference to the index is for comparative purposes only.

2Benchmark: MSCI Arabian Markets ex Saudi Arabia Total, Net Return

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Baring Asset Management is an international investment management firm with investment skills, clients and business locations spanning world markets. Our investment competency encompasses developed and emerging market equity, fixed income and multi-asset portfolio management services offered to institutions, retail investors and private individuals. Worldwide clients include public and corporate pension plans, government agencies, financial institutions, charitable organisations, mutual funds and private individuals.

Baring Asset Management is part of the MassMutual Financial Group, a global, diversified financial services organization. Massachusetts Mutual Life Insurance Company (MassMutual) is one of the largest life insurance businesses in the USA.

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Issued by Baring Asset Management Limited (authorised and regulated by the Financial Conduct Authority).

This Press release includes and is based on forward-looking information and statements that are subject to risks and uncertainties that could cause actual results to differ. Such forward-looking information and statements are based on current expectations, estimates and projections. Important factors that could cause actual results to differ materially from those expectations include, among others, interest rates and fluctuations in currency exchange rates. Although Baring Asset Management believes that its expectations and the information in this press release were based upon reasonable assumptions at the time when they were made, it can give no assurance that those expectations will be achieved or that the actual results will be as set out in this press release. Barings undertakes no obligation to publicly update or revise any forward-looking information or statements in the press release.

The value of investments and any income from them may go down as well as up. You may not get back all of your original investment. You should not make any assumptions about the future on the basis of this information. Past performance is not a guide to future performance.

For data sourced from Morningstar: © Morningstar, Inc. All Rights Reserved. The information contained herein: (1) is proprietary to Morningstar and/or its content providers; (2) may not be copied or distributed; and (3) is not warranted to be accurate, complete or timely. Neither Morningstar nor its content providers are responsible for any damages or losses arising from any use of this information.

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This year, Baring Asset Management is proud to support Barings is proud to support Providence Row, a charity tackling the root causes to help homeless and vulnerable people www.providencerow.org.uk and also Oasis Child Care Centre, a charity working with families to help vulnerable children http://www.oasischildcare.co.uk.

© Press Release 2013

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