September 28, 2015

CNBC: Bob Diamond - Africa is best place to invest right now

CNBC - Investors looking to place their money outside of the U.S. should look no further than sub-Saharan Africa, Atlas Merchant Capital CEO Bob Diamond said Thursday. "There are a lot of reasons to be positive in the medium-to-long term for sub-Saharan Africa," the former Barclays CEO said in a CNBC " Power Lunch" interview. Click through the following link to read the full article: Bob Diamond: Africa is best place to invest right now


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

September 18, 2015

Fed Rate Hikes - A Back Half 2016 Story, In Our View


After substantial discussion on the Street and volatility across global markets, the Fed chose to ignore the noise and announced that it will not be raising interest rates at this time. We say good for the Fed!

In our view, the Fed was essentially put in a no-win situation, so chose to ignore the noise and focus on fundamentals. Raising rates by 25 basis points makes no sense in terms of the fundamentals of the US economy; plus, further strengthening of the dollar will not help global markets over the long-term despite any near-term relief rally. Keeping rates unchanged may induce continued volatility across markets, but, in our view, the Fed did the right thing, and investors should consider such volatility as an attractive buying opportunity.

In our view, we think future rate hikes are highly unlikely until the second half of 2016 for a variety of reasons. For one thing, politics. 2016 is an election year. So, unless absolutely needed, why mess with the economy and the markets? On the other hand, by late 2016, with the Obama administration on its way out, a rate hike of 25 to 50 basis points could be the signal of a successful presidency. The president entered office at a time the country was hurting from a financial meltdown and could be exiting at a time of a much strengthened economy where a small rate hike could be justified as a new turn in monetary policy. For another thing, inflation trends. The August 2015 Inflation rate was 0.2%, versus the Fed target of 2% for a rate hike. Gas prices are a big factor driving the moderated inflation rate, with prices at the pump down 1% year-over-year. Unless a significant shortage suddenly erupts perhaps due to disruption in the Middle East, we do not foresee a major reversal of the trend. Note that gas prices today are roughly in line with prices in 2009, though with the US economy and the US consumer in a much stronger position. 

US Regular Gasoline Prices

Source:  US Energy Department.
In terms of how the Fed views a sluggish Chinese economy (or, for that matter, any economy outside the US), we think that this week’s decision suggests that the US economy still remains the Fed’s focus. That is how it has always been when the world was dominated by the economies of the US and Western Europe – and that is how the Fed will continue to operate even as other economies bloom. And we agree with that philosophy.

Now, in terms of where to invest, we reiterate once again: take advantage of the market volatility to diversify portfolios. Market behavior is cyclical, and valuations in Africa and other frontier and emerging markets have come down nicely. So take this opportunity to allocate to actively managed funds focused on those regions.      
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

 

BloombergView: Africa Starts to Emerge

BloombergView - I come bearing good news about Africa. The continent is finally starting to emerge. Pessimism about Africa is so pervasive that people don't even have to say it out loud -- it's just assumed. When development economists such as Paul Collier write books with titles like "The Bottom Billion," they remember to mention a handful of countries in Central Asia, but you know the book will be almost entirely about Africa. As for the reason for Africa's benighted situation, explanations range from the legacy of exploitative colonialism to the resource curse to endemic war to the health effects of malaria. Often, in discussions about Africa, there is an undercurrent of racism. Click through the following link to read the full article: Africa Starts to Emerge.

Africa Starts To Emerge | Investing in Africa


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

September 17, 2015

Bloomberg: Kellogg to Buy $450 Million Multipro Stake to Grow in Africa

Bloomberg Kellogg Co. agreed to buy a 50 percent stake in Nigerian food distributor Multipro for $450 million and is creating a joint venture with Tolaram Africa to help expand on the continent. Chief Executive Officer John Bryant said in the statement that sub-Saharan Africa is a "tremendous opportunity" for Kellogg, with a population of almost 1 billion and an economy expected to more than double in the next 10 years Click through the following link to read the full article: Kellogg to Buy $450 Million Multipro Stake to Grow in Africa


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

September 9, 2015

JOC: DHL pours investment into Africa to grow its coverage

JOC - HONG KONG — DHL Express will invest $20 million in sub-Saharan Africa this year to increase its footprint, taking the German logistics giant’s total investment in the continent to more than $50 million in the last year.

The investment reflected the importance of emerging markets to DHL, which Deutsche Post DHL CEO Frank Appel said contributed more than 20 percent of the group’s revenue, a figure that was expected to grow to 30 percent by 2020.

“Therefore, we will continue to concentrate on organic growth by investing into promising present and future markets,” Appel said in a statement. Click through the following link to read the full article: DHL pours investment into Africa to grow its coverage


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

Forbes: Why You Should Invest In Africa's Fastest-Growing Country

Forbes President Barack Obama’s short visit to Nairobi last month raises hopes for strengthening business ties between the U.S. and Kenya. The Kenya Investment Authority used the event to highlight the investment opportunities in Africa’s fastest-growing country. The organization, which goes by KenInvest, was established by the government in 2004 to advise investors and help foreign companies do business in Kenya.

Dr. Moses Ikiara, managing director of KenInvest, makes a case for why you should invest in Kenya. Click through the following link to read the full article: Why You Should Invest In Africa's Fastest-Growing Country



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