3 Emerging Market Plays For Your Portfolio: Barclays PLC, Ashmore Group plc And PZ Cussons plc

Royston Wild explains the merits of investing in Barclays PLC (LON: BARC), Ashmore Group plc (LON: ASHM) and PZ Cussons plc (LON: PZC).

| More on:

The content of this article was relevant at the time of publishing. Circumstances change continuously and caution should therefore be exercised when relying upon any content contained within this article.

When investing, your capital is at risk. The value of your investments can go down as well as up and you may get back less than you put in.

Read More

The content of this article is provided for information purposes only and is not intended to be, nor does it constitute, any form of personal advice. Investments in a currency other than sterling are exposed to currency exchange risk. Currency exchange rates are constantly changing, which may affect the value of the investment in sterling terms. You could lose money in sterling even if the stock price rises in the currency of origin. Stocks listed on overseas exchanges may be subject to additional dealing and exchange rate charges, and may have other tax implications, and may not provide the same, or any, regulatory protection as in the UK.

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More.

Today I am explaining why developing regions should blast revenues at Barclays (LSE: BARC) (NYSE: BCS.US), Ashmore Group (LSE: ASHM) and PZ Cussons (LSE: PZC) through the roof.

Bank on resplendent returns

Global banking goliath Barclays grabbed the headlines this week with the shock departure of chief executive Antony Jenkins. Concerns over the breakneck pace of restructuring, particularly at the controversial Investment Bank, is thought to have pushed the firm’s head overboard. Indeed, just today Sky News reported that Barclays has put its Italian and Portuguese retail assets on the block.

With the bank’s downscaling in nearby regions naturally drawing investor attention, Barclays’ success across the lucrative regions of Africa has become overlooked more recently, and to a lesser extent its more modest footprint in Asia. The company provides services to more than 14 million customers in a dozen countries on the continent, including regional powerhouses South Africa and Egypt.

Barclays saw income from its Africa Banking division leap 8% during January-March, a result that propelled pre-tax profit almost a quarter high to £295m. Barclays has rising personal income levels and historically-low financial product penetration across the region to thank for this performance, and is consequently ramping up its operations to latch onto these factors — the British firm bought a controlling stake in Kenyan insurance provider First Assurance just last month.

Financial flows ready to charge

Extreme volatility on the Chinese stock market — not to mention the worsening financial plight of Greece — is once again casting doubts on the strength of investor appetite looking ahead. Indeed, significant macroeconomic worries has weighed on the performance of financial services plays like Ashmore Group in recent times, particularly those geared towards developing markets such as the London business.

Still, I remain convinced by the investment potential of these markets in the long-term, and consequently the revenues potential of Ashmore. Although the company’s latest trading statement today revealed a $2.2bn dip in assets during April-June, to $58.9bn, Ashmore noted that emerging markets ‘performed well‘ compared with established territories. And as chief executive Mark Coombs noted, once the Federal Reserve’s actions become clearer, client activity is likely to lift as sentiment towards these new markets improves still further.

Don’t leave this stock on the shelf

Household goods specialists PZ Cussons are certainly betting big on these exciting territories, the business having recently bulked up its presence in these destinations still further. And with good reason: research house McKinsey & Company estimated recently that consumption in developing regions will hit $30tn within a decade, galloping from just $12tn in 2010.

The company hoovered up health food brand five:am last August, and since then has embarked on a variety of product introductions, like that of baby food label Rafferty’s Garden in China and New Zealand. Broadly speaking Cussons continues to enjoy strong sales expansion across Asia and Africa, and in particular its regional growth hub of Indonesia. And boosted by a string of hot brands like Carex soap and Yo drinks, I believe revenues should keep on charging higher.

Should you invest, the value of your investment may rise or fall and your capital is at risk. Before investing, your individual circumstances should be assessed. Consider taking independent financial advice.

Royston Wild has no position in any shares mentioned. The Motley Fool UK has recommended Barclays. The Motley Fool UK owns shares of PZ Cussons. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.

More on Investing Articles

Investing Articles

Will the easyJet share price hit £10 in 2025?

easyJet has been trading well with rising earnings, which reflects in the elevated share price, but there may be more…

Read more »

Investing Articles

2 FTSE shares I won’t touch with a bargepole in 2025

The FTSE 100 and the FTSE 250 have some quality stocks. But there are others that Stephen Wright thinks he…

Read more »

Investing Articles

Could this be the FTSE 100’s best bargain for 2025?

The FTSE 100 is full of cheap stocks but there’s one in particular that our writer believes has the potential…

Read more »

Investing Articles

No Santa rally? As the UK stock market plunges 3%, I’m hunting for bargains

Global stock markets are in turmoil as Christmas approaches but our writer is keen to grab some bargains while prices…

Read more »

Petrochemical engineer working at night with digital tablet inside oil and gas refinery plant
Investing Articles

BP share price to surge by 70% in 12 months!? How realistic is that forecast?

Brand new analyst forecasts predict that the BP share price could rise considerably next year! Should investors consider buying this…

Read more »

Investing Articles

BT share price to double in 2025!? Here are the most up-to-date forecasts

The BT share price is up more than 40% over the last eight months with some analysts predicting it could…

Read more »

Investing Articles

Rolls-Royce share price to hit 850p!? Here are the latest expert projections

Analysts predict the Rolls-Royce share price could surge by another 50% in the next 12 months as free cash flow…

Read more »

Investing Articles

Will NatWest shares beat the FTSE 100 again in 2025? Here’s what the charts say

NatWest shares have left rivals Lloyds and Barclays in the dust in 2024. Stephen Wright looks at whether the stock's…

Read more »