Emerging Markets Reimagined: Risk, Reward & the Road Ahead

Summary

• Tia’s core call: the EM rally — up 20% this year after 30% last year — is “absolutely not a trade” but the start of a long cycle, echoing the early 2000s when EM beat the S&P by 10% a year for a decade. The setup: 10x forward PE (half the US valuation) with twice the earnings growth, and positioning so light that emerging and frontier markets hold 85% of global population, near half the global economy, yet “just over 10% of global market cap.”
• Frontier is outrunning EM proper: Nigeria is up over 170% in a year and still trades under 7x earnings, a catch-up Tia says is “already playing out” after Tinubu delivered reforms “nobody thought was actually possible,” and Nigeria’s energy sector was completely transformed with a new refinery built by Dangote, while the currency stabilized.
• Tia’s three picks: Kiwoom Securities (Korea’s #1 retail broker in a market up over 70% this year after being up 70% last year, 8x PE, 1.5x book, 20% ROE, with the omnibus account opening Korea to US retail for the first time); Warsaw Stock Exchange (Poland has over 50% of household assets in cash deposits and the government intends to enact legislation by year-end to move part of that liquidity into the stock market); and YPF (dominant Vaca Muerta developer with over 40% of concession acreage, 25% annual production growth through 2030, at 3x EV/EBITDA — “the absolute historical rock-bottom valuation”).
• Francis’s Jumia pitch: the dominant African e-commerce platform across eight of the biggest markets, NYSE-listed and liquid, with a moat that “compounds with scale” — mostly direct-from-China sourcing, a fully controlled distribution network to reach smaller cities, and the continent’s most respected e-commerce brand. “We’ve been competing with the likes of Temu, and we’re winning.” His framing: “this is merely [likely MercadoLibre] or Shopee 20 years ago” at a sub-$1 billion valuation.
• The operating insight behind Jumia: the real African customer makes $200–400 a month and lives in a small town — build for that market, “not the market you’re dreaming of,” with cheap reliable basics and maniacal cost control, “because nobody can pay for waste in those markets.” In Nigeria, “reliability is luxury.”
• Structural tailwind for the whole thesis: Africa goes from 1.5 to 2.5 billion people in 25 years, and in 2025 more babies were born in Nigeria alone than in all of Europe — the last retail markets on Earth still growing and still unsaturated by supply.

Deep dive

1. “Absolutely not a trade” — the EM cycle case

• Tia’s opening claim: EM is up 20% this year after 30% last year, and this is the right time to buy — she’s “been doing this long enough to remember” the early 2000s, when EM outperformed the S&P by 10% a year over 10 years, and thinks this cycle will be “longer, more meaningful.”
• The evidence from the road: massive AI investment in Asia, infrastructure and defense resurgence in Europe, a commodities boom and supply-chain realignment in Latin America — all at 10x forward PE, half the US valuation with twice the earnings growth.
• The positioning kicker: emerging and frontier markets are 85% of global population, close to half the global economy, and “just over 10% of global market cap.”

2. Africa’s new macro cycle: demographics plus reform

• Francis’s two trends: Africa grows from 1.5 to 2.5 billion people in 25 years — in 2025 “more babies were born in Nigeria only than across all of Europe” — and a new macro cycle of currency stability after the brutal 2021–24 volatility, as governments “under pressure” enacted pro-business reforms.
• Nigeria is the exemplar: Tinubu delivered “reforms and an economic agenda that nobody thought was actually possible,” Nigeria’s energy sector was completely transformed with a new refinery built by Dangote, the currency stabilized — and Tia notes it’s up over 170% in a year yet still under 7x P/E. A softer dollar, “if we believe in that scenario,” helps further.

3. Three themes: capital markets, commodities, technology

• Capital markets is the purest bull-market play — exchanges, brokers, asset managers — because the IPO window is opening sustainably for the first time in 15 years: four of last year’s top IPO markets globally were EM, and Tia’s fund is currently in Uzbekistan’s largest and first IPO.
• Commodities means the enablers of the new global supply chain, particularly Latin America; technology spans the global champions — TSMC in foundry, Samsung in memory — plus domestic tech players. Tia’s shift after 20 years in Africa: access used to mean “banking, telecommunications, beverages” — now the new economy is investable, including her position in Jumia.

4. Jumia: build for the real market, not the dream market

• Francis’s reframe of “is Africa ready for e-commerce?” — the wrong question. Demand was always there; the challenge is embracing the market as it is: a core customer earning $200–400 a month in a small town, served with value-for-money basics and “being maniacal about cost management because nobody can pay for waste in those markets.” “In a country like Nigeria, reliability is luxury.”
• The investment case: NYSE-listed with real liquidity, across eight of the biggest markets, and barriers — mostly direct-from-China sourcing, a fully controlled distribution network to reach smaller cities, the continent’s most respected e-commerce brand — that are “really impossible to replicate.” “We’ve been competing with the likes of Temu, and we’re winning.” His close: this is merely [likely MercadoLibre] or Shopee 20 years ago, available below $1 billion — though the stock “remains kind of misunderstood and underrated… but not for long.”

5. Tia’s picks: Kiwoom, Warsaw Stock Exchange, YPF

• Kiwoom Securities, Korea’s #1 retail broker: the market is up over 70% this year after being up 70% last year, retail is repatriating assets from US stocks on tax incentives, and the new omnibus account will let American retail into Korea for the first time — at 8x PE, 1.5x book, 20% ROE.
• Warsaw Stock Exchange, the largest in Central and Eastern Europe: Poland is “truly an outlier” with over 50% of household assets in cash deposits, and the government intends, by the end of this year, to enact legislation to move part of that liquidity into the stock market — “a long-term, very high-quality story.”
• YPF, Argentina’s oil and gas champion and dominant Vaca Muerta developer (over 40% of concession acreage): production mapped to grow 25% a year through 2030, at 3x EV/EBITDA — “the absolute historical rock-bottom valuation. Low valuations, high growth profile, overlooked, under-owned.”