July 30, 2015

Financial Times - Smartphones and Chinese banks hold key to EM exposure

The Financial Times briefly reviewed the MSCI EM index this week. While the index claims to be a global index of 24 countries, the reality is that China accounts for 25% of the index. Some investors pursue a passive strategy of investing in emerging markets, whereas they can be better served by researching high quality active managers focused on specific regions, such as Nile Capital Management. We have found that even a 10% allocation to an active manager’s fund can lead to substantial improvement across an otherwise passively managed portfolio. To us, this again highlights need for investors to move beyond passive investment management when considering emerging markets and to research high quality, regionally-focused active investment managers. For more on the article from The Financial Times, please click on this link, Smartphones and Chinese banks hold key to EM exposure , and for more on our funds, please visit our website Nile Funds and send us an email.


Nile Capital Management
We Know Africa: From Cairo to Cape Town
For more information please call 646-367-2820

ThinkAdvisor - Global Entrepreneurship Summit Highlights Growing African Business

ThinkAdvisor - The U.S. hosted the first Global Entrepreneurship Summit in Washington, D.C. in 2010. This past weekend, President Barack Obama attended the sixth annual gathering of entrepreneurs large and small, business leaders, mentors, and high-level government officials in Nairobi, Kenya, an event that not only underscores the importance of entrepreneurship globally, but the increased importance of Africa as a hub for new and exciting business ventures. 

Larry Seruma, our Portfolio Manager, shared a few key points for investors looking at Africa. Click through the following link to read the full article: ThinkAdvisor - Global Entrepreneurship Summit Highlights Growing African Business


Nile Capital Management
We Know Africa: From Cairo to Cape Town
For more information please call 646-367-2820

July 27, 2015

Gold prices remain the focus on the market this week - Spot Prices hitting new 5-year lows

Source: Bloomberg
The most recent declines over the past 10 days may be attributed to a few factors, in our view:

  1. China gold reserves was up 57%, only half of what was expected by the market, with its share of total reserves in decline.
  2. The markets continue to anticipate a hike in US interest rates this year by the Federal Reserve, moderating the appetite investors have for non-yielding assets like gold and also fueling concerns that borrowing costs for holding such assets may rise.
  3. Geopolitical crises, such as Greece and the US reaching a deal with Iran, seem to be moderating, thus, calming investor fears which would send them into defensive assets like gold.

Africa accounts for a fifth of global gold exports, according to the African Development Bank, and, of the key markets in Africa, South Africa accounts for 10% of global gold exports. (The others are Ghana at 17%, Mali and Tanzania at 9% each, and the rest of Africa at 15%.) We note, however, that, whereas in 1983 South Africa produced 64% of the world’s supply (21 million tonnes), in 2014 the country produced only 6% of supply (5 million tonnes). Also, despite the fall in gold prices, the benchmark equity index for South Africa has almost tripled since 2011 relative to the price of bullion. The potential damage to South Africa from falling gold prices seems to be well under control, in our opinion, again pointing to the need for investors to follow an active management strategy when investing in Africa. 



Nile Capital Management
We Know Africa: From Cairo to Cape Town
For more information please call 646-367-2820

Bloomberg - Emerging Market Currencies Tumble to Record Low in 'Violent' Selloff





Bloomberg Emerging-market currencies are in free fall.

An index of the major developing-nation currencies fell to an all-time low this week, extending its drop over the past year to 19 percent, according to data compiled by Bloomberg going back to 1999. The Russian ruble, Colombia's peso and the Brazilian real have fallen more than 30 percent over the past year for some of the worst global selloffs. Click through the following link to read the full article: Emerging Market Currencies Tumble to Record Low in 'Violent' Selloff


Nile Capital Management
We Know Africa: From Cairo to Cape Town
For more information please call 646-367-2820

July 17, 2015

Active Management Strategy will be key to overcome currency challenges

We briefly review indices performance of key regions in Africa. We note that trends in Nigeria appear to show signs of stabilizing. (All data herein from BBG, as of 7/14/15.)

Country
One-Year Return (USD)
YTD Return 2015 (USD)
Egypt
-25.87%
-26.78%
Kenya
-17.42%
-18.25%
Nigeria
-40.13%
-16.55%
South Africa
-12.45%
-1.97%

This compares to general indices performance.

Index
One-Year Return (USD)
YTD Return 2015 (USD)
MSCI EM
-9.46%
-0.23%
MSCI FM
-16.32%
-3.66%
S&P 500
8.87%
3.55%
MSCI World
3.18%
4.66%

Note that the strong dollar continues to weigh on indices performance and is a key factor for the disparity between the S&P 500 returns versus the other MSCI benchmarks.

Country
One-Year Return (USD)
YTD Return 2015 (USD)
Egypt EGP
-8.66%
-8.64%
Kenya KES
-13.66%
-10.83%
Nigeria NGN
-18.07%
-7.34%
South Africa ZAR
-13.37%
-6.11%

Nigeria and South Africa currencies have had some signs of strengthening.

Kenya and Uganda have been actively tightening their monetary policies to shore up their currencies and fight inflation. Kenya has raised its benchmark interest rate by 300 basis points over the past two months to 11.5%: Kenyan Treasury Secretary Henry Rotich now believes that the central bank has room to pause its rate-tightening cycle. The Bank of Uganda likewise raised its benchmark interest rate by 150 basis points at an unscheduled meeting this week, the third increase this year.

We argue that the more developed the emerging economy, the more export-dependent the economy, and thus the more that country benefits from a strong dollar. Note the disparity even among BRIC countries. All-in, this argues for the long-term potential of Africa and the importance of an active management strategy to navigate through the near-term challenges.

Country
One-Year Return (USD)
YTD Return 2015 (USD)
Brazil
-32.31%
-9.71%
Russia
-32.46%
16.32%
India
7.63%
1.94%
China
89.28%
16.43%
The views expressed are opinions subject to change and are not investment advice.


Nile Capital Management
We Know Africa: From Cairo to Cape Town
For more information please call 646-367-2820

July 16, 2015

Value Walk - Mark Mobius Stepping Down As Lead Manager At Templeton Emerging Markets investment trust


Value Walk - In a sign of the changing times, Mark Mobius announced he is resigning as lead manager of the Templeton Emerging Markets investment trust after almost 27 years. He will, however, remain employed by Templeton as a portfolio manager for the more than $2 billion fund. The legendary Mobius is to be replaced by Carlos Hardenberg, who has been part of Templeton's emerging markets team for more than 13 years. Click through the following link to read the full article: Mark Mobius Stepping Down As Lead Manager At Templeton Emerging Markets investment trust .



Nile Capital Management
We Know Africa: From Cairo to Cape Town
For more information please call 646-367-2820

July 15, 2015

Mpesa, Greece and Safaricom Kenya!

FT Alphaville Ft.com examines digital payments as implemented via M-pesa in Kenya, parallels (or lack thereof) with Greece, and considerations of effects on the banking system.  Click through the following link to read the full article: Mpesa: the costs of evolving an independent central bank.


Nile Capital Management
We Know Africa: From Cairo to Cape Town
For more information please call 646-367-2820

July 14, 2015

Voice of America News: Interview with Larry Seruma and the Prospects on the Greece Financial Crisis & The Global Markets

video
Video shown for informational purposes only and is not investment advice

Alexis Christoforous, correspondent of Voice of America News, interviewed Larry Seruma, from Nile Capital Management, LLC about investment opportunities in Africa and the implication in Greece and the stock market swings. The interview covered Larry's perspective on the Greek Financial Crisis, what that means for African investors, how Investment decisions are been affected and current economic issues and its impact on African and global markets. 


Nile Capital Management
We Know Africa: From Cairo to Cape Town
For more information please call 646-367-2820

June 29, 2015

FT: PwC forecasts Africa’s mutual fund industry surpassing $1 trillion by 2020

The Financial TimesAfrica’s mutual fund industry should see assets surpass the $1tn milestone by the end of 2020 as rising prosperity boosts demand for pensions and life insurance products, according to PwC, the auditor. But the development of an asset management sector fit for Africa’s needs in the twenty-first century remains a daunting challenge. It warns that poor infrastructure and liquidity in many stock markets could hamper the development of mutual funds across the continent. Click through the following link to read the full article: PwC forecasts Africa’s mutual fund industry surpassing $1 trillion by 2020



Nile Capital Management
We Know Africa: From Cairo to Cape Town
For more information please call 646-367-2820

May 28, 2015

Nile Funds: Nile Pan Africa Fund Five Year Anniversary

Nile Capital Management is pleased to announce the five year anniversary of its Nile Pan Africa Fund (NAFAX), an actively managed mutual fund that focuses exclusively on the continent of Africa.

Since Nile Pan Africa Fund’s inception on April 28, 2010, the Fund has returned 8.31% annualized. For the same period, the Dow Jones Africa Titans 50 index returned 0.76%, the MSCI Emerging Markets index returned 3.32% and the MSCI Frontier Markets index returned 5.87%. For the past 12 month period, the Nile Pan Africa Fund returned -5.40%, compared to -11.61% for the Dow Jones Africa Titans 50 index, 7.80% for the MSCI Emerging Markets index and -5.40% for the MSCI Frontier Markets index.

Nile Pan Africa Fund has had lower risk, as measured by standard deviation of returns, while delivering higher returns than the MSCI Emerging Markets index since inception. The Fund has managed its return since inception while keeping annualized standard deviation of returns to 15.72%, achieving a Sharpe Ratio of 0.53. In comparison, the MSCI Emerging Markets index had annualized standard deviation of returns of 18.38% and a Sharpe Ratio of 0.16.


Image
Source: Morningstar

The performance of Nile Pan Africa Fund was given Lipper’s highest ranking, 5 (top quintile), for Total Return for the 3 year period out of 532 funds, 5 year out of 335 funds, and overall out of 532 funds in the Emerging Markets Funds category for the period ending April 30, 2015.

The International Monetary Fund (IMF) has just published its Regional Economic Outlook for Sub-Saharan Africa in April 2015 and has forecasted 4.5% Real GDP growth for Sub-Saharan Africa for 2015, and 5.1% for 2016, compared to 4.3% for 2015 and 4.7% for 2016 for Emerging Markets, and just 2.4% for 2015 and 2.4% for 2016 for advanced economies. Our view continues to be that growth in Africa is robust relative to developed and other emerging and frontier markets, thus, we still see potential for higher equity prices in Africa for the intermediate to longer term.

From an allocation perspective, we believe Nile Pan Africa Fund offers access to a region with robust long term growth potential, and the strategy has a five year track record of delivering superior risk-managed returns. For those that have yet to make an allocation to this region, we believe the timing is now right for this opportunity.

Larry Seruma
Portfolio Manager
Nile Pan Africa Fund

For updated Nile Pan Africa Fund performance, visit http://nilefunds.com/our-funds/


Nile Pan Africa Fund Performance

Inception Date is April 28, 2010 for Nile Pan Africa Fund
As of April 30, 2015As of March 31, 2015
Fund Name1 Month1 Year5 YearSince Inception1 YearSince Inception
Nile Pan Africa Fund (NAFAX) Without Load4.38%-5.40%-8.32%8.31%-6.76%7.52%
Nile Pan Africa Fund (NAFAX) With Load-1.64%-10.82%7.05%7.04%-12.13%6.23%
Dow Jones Africa Titans 50 Index9.90%-11.61%0.41%0.76%-15.57%-1.14%
MSCI Emerging Markets Index7.69%7.80%3.02%3.32%0.44%1.84%
MSCI Frontier Markets Index3.75%-5.40%5.85%5.87%-3.62%5.18%
Returns for Nile Pan Africa Fund are for the A Share Class (NAFAX) only, other share classes will vary.

The performance data quoted here represents past performance. Current performance may be lower or higher than the performance data quoted above. Investment return and principal value will fluctuate, so that shares, when redeemed, may be worth more or less than their original cost. Past performance is no guarantee of future results. As stated in the current prospectus, Nile Pan Africa Fund's total annual operating expense ratio (gross) is 2.50% for Class A shares. The Fund’s investment adviser has contractually agreed to reduce its fees and/or absorb expenses of the funds, at least until July 31, 2015, to ensure that the Total Annual Fund Operating Expenses After Fee Waiver (exclusive of any acquired fund fees and expenses, borrowing costs, taxes and extraordinary expenses) will not exceed 2.50% for Nile Pan Africa Fund Class A, subject to possible recoupment from the Funds in future years. Please review the Funds’ prospectus for more detail on the expense waiver. Results shown reflect the waiver, without which the results could have been lower. A Fund's performance, especially for very short periods of time, should not be the sole factor in making your investment decisions. For performance information current to the most recent month-end, please call toll-free 1-877-682-3742.

Investors should carefully consider the investment objectives, risks, charges and expenses of the Nile Funds. This and other important information about the Funds is contained in the prospectus, which can be obtained by calling 1-877-682-3742. The prospectus should be read carefully before investing. The Nile Funds are distributed by Northern Lights Distributors, LLC, member FINRA/SIPC. Nile Capital Management, LLC is not affiliated with Northern Lights Distributors, LLC.

Mutual Funds involve risk, including possible loss of principal. Frontier market countries generally have smaller economies and even less developed capital markets than traditional developing markets, and, as a result, the risks of investing in developing market countries are magnified in frontier market countries.

Adverse changes in currency exchange rates may erode or reverse any potential gains from the Fund's investments. ETF's are subject to specific risks, depending on the nature of the underlying strategy of the fund. These risks could include liquidity risk, sector risk, as well as risks associated with fixed income securities, real estate investments, and commodities, to name a few. Non-diversification risk, as the Funds are more vulnerable to events affecting a single issuer. Investments in underlying funds that own small and mid-capitalization companies may be more vulnerable than larger, more established organizations. The Fund's exposure to companies primarily engaged in the natural resource markets may subject the Fund to greater volatility than investments in a wider variety of industries.

There is a risk that issuers and counterparties will not make payments on securities and other investments held by the Fund, resulting in losses to the Fund. In general, the price of a fixed income security falls when interest rates rise. The Fund may invest, directly or indirectly, in "junk bonds." Such securities are speculative investments that carry greater risks than higher quality debt securities.

Lipper ratings for Total Return reflect funds’ historical total return performance relative to peers as of 4/30/15. Overall Ratings are based on an equal-weighted average of percentile ranks for each measure over 3-, 5-, and 10-year periods (if applicable).The Lipper ratings are subject to change every month and are based on an equal-weighted average of percentile ranks for Total Return, Consistent Return and Preservation metrics over 3-, 5-, and 10-year periods (if applicable). The highest 20% of funds in each peer group are named Lipper Leader or a score of 5, the next 20% receive a score of 4, the middle 20% are scored 3, the next 20% are scored 2, and the lowest 20% are scored 1. Lipper ratings are not intended to predict future results, and Lipper does not guarantee the accuracy of this information. More information is available at lipperweb.com. Lipper Leader © 2015, Reuters, All Rights Reserved.

Lipper Fund Awards are based on Lipper’s Consistent Return calculation. Lipper scores for Consistent Return reflect funds’ historical risk-adjusted returns relative to funds in the same Lipper classification and include each fund’s expenses and reinvested distributions, but exclude sales charges. Consistent Return values are calculated with all eligible share classes for each eligible classification. The highest Lipper Leader for each Consistent Return value within each eligible classification determines the fund classification winner over three, five or 10 years.

Lipper Award winners are recognized for being the top-risk adjusted performing funds in their respective Lipper peer groups for the listed periods ending December 31, 2013. Past performance or ranking is not indicative of future results. Lipper ratings are not intended to predict future results, and Lipper does not guarantee the accuracy of this information. More information is available at www.lipperweb.com. Lipper Leader Copyright 2014.

Standard Deviation measures the degree of variation of returns around the mean (average) return. The higher the volatility of the investment returns, the higher the standard deviation will be. Sharpe Ratio measures the risk-adjusted return by dividing average return by the standard deviation of return.
Dow Jones Africa Titans 50 Index: Measures the stock performance of 50 leading companies that are headquartered or generate the majority of their revenues in Africa. Stocks are selected to the index by float-adjusted market capitalization, subject to screens for size and liquidity.
MSCI Emerging Markets Index: A market-capitalization weighted index of emerging market country indices.
MSCI Frontier Markets Index: A market-capitalization weighted index of frontier market country indices.
Investors cannot directly invest in an index and unmanaged index returns do not reflect any fees, expenses or sales charges.
2260-NLD-5/19/2015


Nile Capital Management LLC
116 Village Blvd, Ste 306 | Princeton, NJ 8540 |
info@nilecapital.com | office (646) 367-2820



Nile Capital Management
We Know Africa: From Cairo to Cape Town
For more information please call 646-367-2820

May 27, 2015

Bloomberg: Tanzania Shilling Drops to Record; Kenya Currency Falls 6th Week

Bloomberg Tanzania’s shilling dropped to a record low to lead declines among currencies in East Africa’s biggest economies this week as investors sought dollars amid a rally in the foreign currency.  Click through the following link to read the full article: Tanzania Shilling Drops to Record; Kenya Currency Falls 6th Week.


Nile Capital Management
We Know Africa: From Cairo to Cape Town
For more information please call 646-367-2820

April 22, 2015

Larry Seruma joining the 2015 INTERNATIONAL FINANCIAL FORUM NEW YORK


Larry Seruma was invited to participate among the delegates and faculty in the 2015 INTERNATIONAL FINANCIAL FORUM NEW YORK featuring THE 7TH ANNUAL INTERNATIONAL M&A AWARDS.

The International Financial Forum is a private invitation-only summit that will take place on April 27-28 in New York, NY, and will be comprised of two feature events: the Cross Border M&A Symposium and the 7th Annual International M&A Awards.

Two significant trends are currently affecting international investment strategies and the advancement of cross border M&A. Click through the following link to view the Event Profile for the 2015 International Financial Forum Featuring the 7th Annual InternationalM&A Awards.



Nile Capital Management
We Know Africa: From Cairo to Cape Town
For more information please call 646-367-2820 

April 17, 2015

Mark Mobius - A New Way Forward for Nigeria?


Mark Mobius - A couple of years ago, many investors were optimistic about Nigeria and the stock market was booming, buoyed by strong economic growth and government reforms to improve the country. However, by 2014, the mood soured amid a series of unfortunate events, including the terrorist acts of Boko Haram, an Ebola outbreak and the weakening price of oil, which is the major source of income for the government and has a big impact on the economy. Despite these challenges, we continue to pursue long-term investments in Nigeria for a number of reasons. Not only is Nigeria Africa’s largest economy and a major consumer market, but the outcome of Nigeria’s presidential election in March proved its people are ready for change—hopefully for the better. Click through the following link to read the full article: Mark Mobius - A New Way Forward for Nigeria?


Nile Capital Management
We Know Africa: From Cairo to Cape Town
For more information please call 646-367-2820

April 9, 2015

Bloomberg - Nile Capital’s Larry Seruma on Best Consumer Plays in Africa (Audio)

The Bloomberg Advantage Podcast
Hosted by Kathleen Hays and Vonnie Quinn

The Bloomberg Advantage with Kathleen Hays and Vonnie Quinn interviewed Larry SerumaChief Investment Officer at Nile Capital Management, regarding the economic outlook on Africa. Click through the following link to hear the audio Nile Capital’s Larry Seruma on Best Consumer Plays in Africa (Audio)


Nile Capital Management
We Know Africa: From Cairo to Cape Town
For more information please call 646-367-2820

April 7, 2015

CNN - Nigerians give Buhari mandate to fight corruption


CNN International interviewed Larry Seruma regarding the latest news and headlines about Nigeria's Elections. This is probably Nigeria's most tense and important election since the country returned to democracy in 1999.

During the interview Larry discussed the results of Nigeria's presidential election, the winner Muhammadu Buhari and its impact from an economic and a global perspective. The question is now what? Can he govern? Can the opposition manage the economy or government? They have no experience of governing - can they pull it off?


Nile Capital Management
We Know Africa: From Cairo to Cape Town
For more information please call 646-367-2820 

March 13, 2015

WSJ: China’s CIC Wealth Fund Shifts Focus to Emerging Markets — Optimistic About Africa

China Investment Corp., a $653 billion sovereign-wealth fund, plans to invest more in emerging markets where there is less competition and a greater need for capital. PHOTO: EUROPEAN PRESSPHOTO AGENCY

The Wall Street Journal BERLIN — China’s $653 billion sovereign-wealth fund is looking to invest more in emerging markets, according to an infrastructure investing official at China Investment Corp.

CIC, which has made several high profile investments in the U.S. and Europe in recent years, is targeting emerging countries where there is less competition, more opportunity to tap growth and a greater need for capital, the executive said. Click through the following link to read the full article: China’s CIC Shifts Wealth Fund Focus to Emerging Markets


Nile Capital Management
We Know Africa: From Cairo to Cape Town
For more information please call 646-367-2820

March 6, 2015

Bloomberg: Into Africa - China Plays U.S. in Great Power Game

Source: Brookings Africa Growth Initiative from International Monetary Fund data

Bloomberg - Africa has long been a battleground for world powers. Two giants playing there these days are China, which is spending freely throughout the continent to scoop up resources and tap some of the world’s fastest-growing economies, and the U.S., which is looking to do more business. Both Chinese and U.S. companies expect to profit from their African stakes. The question is whether Africans can win, too. Click through the following link to read the full article: Into Africa - ChinaPlays U.S. in Great Power Game


Sources: United Nations Conference on Trade and Development (investments); UN (populations); World Bank (electricity)


Nile Capital Management
We Know Africa: From Cairo to Cape Town
For more information please call 646-367-2820

March 5, 2015

The Financial Times: GE and Philips scan Africa medical market

The Financial Times - Judging by the long and determined-looking queue waiting to meet Samuel Were in London last week, executives from medical equipment companies fully grasp the near-$35bn value that the International Finance Corporation puts on Africa’s healthcare market. Click through the following link to read the full article: 

No electricity, no problem: Philips’s wind-up foetal heart rate monitor

Nile Capital Management
We Know Africa: From Cairo to Cape Town
For more information please call 646-367-2820