December 21, 2015

Larry Seruma’s interview with Chuck Jaffe on the Money Life Show


Please listen to Larry’s interview with Chuck Jaffe on the Money Life Show. Larry provides his thoughts on investing in Africa.
A few key points include:

  • The best way to think about Africa is as a frontier market with the benefit of emerging markets exposure underneath the surface. Frontier markets tend to be less liquid given less coverage by Wall Street – about 55 countries on the continent qualify as frontier markets. However, based on market capitalization, 2 countries on the continent (South Africa and Egypt) qualify as emerging markets.

  • Active managers like Nile Capital Management choose their investments in Africa on a country by country basis.

  • In comparing Africa and BRIC, we believe Africa has the advantage in terms of both valuation and growth potential. Less coverage of African markets means lower multiples and bigger discounts to intrinsic value. Anticipated population growth in Africa over the next twenty years suggests market expansion potential, while acceleration in urbanization suggests greater cost efficiencies and thus greater profitability.

  • When making investments outside the United States, investors should think about performance ex-currency. A strong dollar negatively impacts overall performance, even as fund managers like Nile Capital Management have historically demonstrated solid stock picking and portfolio management.

  • In terms of allocating to Africa, we believe that clients should consider that Africa today represents 4% of global GDP and is expected to grow to about 12% of global GDP over the next twenty years. Also, we believe that an active management approach to investing, such as that used by Nile Capital Management, can potentially drive wealth for investors over the long term.
For more information, please listen to Larry’s interview.

http://www.moneylifeshow.com/SaveFiles1/Upload_Files/151208%20-%20Big%20Interview%20with%20Larry%20Seruma.mp3
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


     

December 11, 2015

Oil Continues to Spiral

Over the past week, we continue to see volatility in the markets ahead of next week’s announcement by Janet Yellen regarding Fed policy. Aside from the uncertainty in Fed rates, oil prices and a strong dollar continue to impact the markets.

Oil prices faced another unraveling as the likelihood of rising OPEC production going forward became a focus in the markets, along with strength in the US dollar, solid US production, and a continuing global supply glut.

Figure 1. The Decline in Brent Oil and Crude Oil Prices
Source: FactSet
Last Friday, OPEC decided to continue pumping oil at its current output level, which in November was 31.695 million barrels per day, the largest monthly level in three years. Yet, OPEC cut its forecast for non-OPEC production in 2016, citing the impact of low oil prices and falling investments in oil. The logic is that low prices may force private oil companies out of business, thus helping OPEC. However, the International Energy Agency has indicated that the world’s stockpile of oil is at a record 3 billion barrels and continues to grow. Crude oil inventories are at levels not seen in at least 80 years.

The citing of this glut is a change in past months where declining oil prices was more a result of a strengthening US dollar. As the dollar strengthens, other currencies clearly decline in value such that holders of those other currencies tend to slow down their purchase of these commodities, causing further declines. Essentially, commodities and currencies spiral downward.

We think that investors should look upon the decline as an attractive entry point to invest in actively managed funds such as those offered here at Nile Capital Management. We expect that, as 2016 progresses and a front runner in the US elections becomes clear, the markets should rebound. Hence, we believe investors should consider taking a long-term approach just as we do and allocate to their positions.

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

December 9, 2015

Bloomberg: Four reasons Africa will weather China's slowdown

Bloomberg - The Forum on China-Africa Cooperation in Johannesburg on Dec. 4-5 will mark the growing importance of relations between the Middle Kingdom and the continent. The pomp of the event can’t disguise the fact that the slowdown in the Chinese economy is having repercussions in Sub-Saharan Africa, most notably in Zambia due to its reliance on China’s demand for copper. However, slower growth in China will be more of a speed bump for the region than a change in direction, and there are at least four reasons not to overstate the negative impact. Click through the following link to read the full article: Four reasons Africa will weather China’s slowdown







































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