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

Gold Spot Prices
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

Emerging Market Currencies in Free Fall




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

Templeton Emerging Markets Investment Trust Changes

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