EMERGING EUROPE - Growth investors should look at the Central European pharmaceuticals sector, says Baring Asset Management. According to BAM, Central European pharmaceutical companies are either supplying specialist products or breaking into the generics market. Their experience and cost advantages mean they can take market share away from the multinationals.
Klaus Bockstaller, fund manager, says: “Pharmaceutical production for the old Eastern Bloc trading region was concentrated within Hungary, Yugoslavia and countries such as Poland who focused on cheap, easy to produce drugs. The sector has continued to flourish.
“Today the largest remaining independent pharmaceutical companies in Central Europe, Richter, Krka and Pliva, have built up strong franchises in the region and can successfully survive independently for the foreseeable future. This will offer potential opportunities in the coming years which could be augmented by further global consolidation which would see these companies as take-over targets.”
Overall, Baring Emerging Europe is currently overweight in Russia, Estonia, Hungary and Croatia as well as in cash, and underweight in Slovenia, Czech Republic, Slovakia, Turkey and Poland.
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