Mobile Technology in Africa Continues to Make Rapid Inroads

In our discussion of investment opportunities in Africa, we at Nile Capital focus on three key themes around which we seek to invest.  One of these themes is the growth in infrastructure networks.  While this means that we seek opportunities in Africa’s growing physical infrastructure, this focus also extends to Africa’s growing digital infrastructure and mobile technology sector.  A recent article in the Wall Street Journal Technology blog helps explain why.  

As we have written in the past, the opportunity to invest in Africa’s growing consumption power is substantial.  Already Africa is a continent which contains over one billion people: put differently, about one out of every seven human beings currently lives in Africa.  Based on population growth rates, the continent’s population is expected to grow to over two billion by 2040, at which time approximately one in every four people on the globe will be African.  

In addition, Africa’s telecommunications land line network remains woefully inadequate.  In many countries where populations climb into the millions, the number of land line phones barely breaks five figures.  The challenge and prohibitive cost of maintaining a land-line network had for many years made it impossible for Africans to remain connected.

However, the introduction of cellular phone networks has caused a substantial shift in the landscape on the continent.  Whereas at the turn of the century cell phones were still relatively uncommon, market penetration over the past ten years has been profoundly rapid.  As we previously wrote:

Since the year 2000, McKinsey notes that 316 million new phone subscribers have signed up in Africa. However, they also note that in 2008 only 39% of Africa’s population had access to telecom services , 38% had access to modern retail, and 20% had access to banking (note that these statistics include South Africa, where the numbers are 92%, 68%, and 60% respectively, skewing the average up). It is amazing to think of the potential for growth in companies that are able to fill those gaps.

According to the Wall Street Journal’s Tech blog, cellular penetration across Africa has not only remained strong in the subsequent years, but it has actually overtaken Latin America as the world’s second largest cellular phone network, behind only the Asia-Pacific region.  According to the GSM Association (the global mobile phone operator’s body), Africa’s cell phone market has grown by more than 20% annually over the past five years, bringing the total number of subscribers above 649 million through the fourth quarter of 2011.  From 2007 through 2011, the number of cellular connections has more than doubled, rising from 283 million only five years ago.  In addition, the Association noted that it expects this number to rise to 735 million by the end of 2012.   

However, there remains a significant opportunity for further penetration in the cellular space.  While access has continued to improve, the Association also noted that 36% of individuals in Africa’s 25 largest markets remain without access to cellular phones.  In addition, 96% of phones are currently pre-paid, and data technology has only just begun to make inroads in the market.

Nile Capital, believes that there are a number of opportunities to participate in Africa’s growing mobile sector.   While this may mean participating in the growth of some of Africa’s largest telecommunications firms, it also means understanding how cell phones can change the landscape of communication.  For example, mobile banking is now making it possible for Africans who reside far from local branches to send and receive funds electronically, which helps to drive growth in retail bank deposits.  

While cellular communication in Africa becomes more prevalent and services improve, we seek to identify trends and opportunities to help our clients share in the growth.

To read the full report by the GSM Association, please visit here.

For more information about investing in Africa, please contact Nile Capital Management at (646)367-2820 or info@nilecapital.com. 

We know Africa - from Cairo to Capetown.

Market Watch: Africa “The Most Fascinating Region in the World Right Now”

In an article published yesterday on Market Watch, the opportunity for investing in Africa has again been highlighted, with the author noting that Africa may be the ‘final frontier.’  While the article notes that investors’ perceptions of Africa are still 'rooted in the past,' it also points out that many of Africa’s perceived challenges are similar to Europe during the Industrial Revolution, or even Asia in the not so distant past. 

The article justifiably points out that there are yet a number of hurdles to be overcome as Africa continues to grow.   However, while it points out that political challenges remain, and infrastructure networks are often insufficient, it also notes that a number of countries are in a 'virtuous cycle,' in which faster growth of tax revenue facilitates higher infrastructure spending, which encourages faster growth.  As many of Africa’s economies are expected to grow by 7% or more in the coming years, this cycle is expected to perpetuate itself in many of Africa’s nations.

Overall, the article points out that an emerging Africa has two significant implications for the global economy: first, it could precipitate a turnaround in the bearish sentiment around the global economy.  Many investors are presently focused on concern over the Euro, and seeking the next growth story for investment.  Perhaps, the article suggests, that Africa is it.  In addition, the article notes that Africa could be the last real emerging market story.  Globally, nowhere is as underdeveloped as Africa, and should the continent continue to grow as it has been in recent years, it is only a matter of time before it could experience ‘explosive’ growth.   We could not agree more.

For more information about investing in Africa, please contact Nile Capital Management at (646)367-2820, or info@nilecapital.com 

We know Africa - from Cairo to Capetown.

De Beers Moves Sorting and Sales of Diamonds to Botswana

An article in the Wall Street Journal caught our eye over the weekend, as it focused on a trend we have been noticing with increasing regularity across Africa.  The article, “De Beers to Deal in Botswana” (link) highlights the recent move by diamond powerhouse De Beers to move its rough diamond sales and sorting activity from its current location in London to the capital of Botswana by the end of 2013.  This move demonstrates a trend we highlighted in an earlier article (found here) about the potential for Africa’s industries to move up the production value chain, thereby creating more and better jobs in value-add industries.   

For more information about investing in Africa, please contact Nile Capital Management at (646)367-2820

We know Africa - from Cairo to Capetown.

Fidelity Investments Agrees: Africa Could be the Next Big Growth Story

In a recent article (found here) the Fidelity Viewpoints series provides a rationale for investors to consider Africa in their portfolio allocations. As noted in the article, there are a number of sectors in Africa that look compelling from both a growth and a diversification perspective. In addition, the article points out that the secular and economic trends in Africa should merit investors’ further consideration.

Although the opportunity for investing in Africa is becoming more widely understood, it is still relatively difficult to find a pure-play investment opportunity in the Continent. In fact, while a handful of funds many have exposure to Africa, we at Nile Capital Management believe that offering an actively managed, pan-Africa mutual fund makes us unique. As you can see in our most recent Fund Fact sheet Nile Capital is invested across Africa, and seeks opportunities throughout the Continent. This is in contrast to other funds where an allocation to African countries outside of South Africa, and at times Egypt, is still relatively rare. In reality, while Fidelity’s manager may speak favorably of the opportunities in Africa’s frontier, less than half of their fund’s exposure is in Africa, with the substantial majority of that Africa exposure allocated exclusively within South Africa.

Nile Capital is truly pan-African, investing in what we see as many of the greater opportunities in Africa’s frontier markets. We seek to invest in opportunities which capture the growth of the consumer class, the demand for infrastructure, and global interest in natural resources. We believe that Nile’s fund vehicle is well positioned to truly participate broadly in Africa's growth. Nile Capital Management’s expertise and focus on the African continent provides investors access to the Continent's potential for growth.

Nile Capital Management, the Advisor to the Nile Africa series of funds, is a New York-based asset management firm with in-depth investment expertise that covers the entire African continent, from Cairo to Cape Town. By focusing on Africa, the company seeks to identify and capitalize on the best investment opportunities in the continent and expand investors' access to emerging/frontier markets. Additional information is available at www.nilefunds.com.

Nile Capital Featured on Seeking Alpha

We at Nile wanted to briefly highlight a recent article about investing in Africa on Seeking Alpha (here), and our firm’s response (here).  Both articles were featured on the site’s front page, further confirming the growing interest for investing in Africa.

For more information about investing in Africa, please contact Nile Capital Management at (646)367-2820

We know Africa - from Cairo to Capetown.

Opportunity in Kenya: Strong Companies, Challenging Macroeconomic Picture

The East African nation of Kenya has, for many years, been one of the Continent’s strongest economies, and a hub in its region.  The country, which has a population of approximately 40 million, and a GDP of approximately $32 billion, has been growing its economy by double-digit rates over the past six years, and is expected to continue to expand at a healthy rate over the next five.  Kenya’s economy is considered the most developed in its region, and is often chosen as a starting point for multinationals looking to expand into East Africa.  In our view, there are a number of compelling opportunities for strong investment returns in Kenya’s stock exchange, however the macroeconomic overhang remains a challenge. 

Notably, Kenya’s Stock Exchange is one of the oldest in Africa, with a current market capitalization of around $12 billion, and over fifty stocks listed to trade.   The Exchange, which is the fifth largest by market capitalization in Africa, operates over an electronic platform, and is well diversified amongst a number of sectors.  However, the exchange only trades around $100 million worth of shares per month, and liquidity remains a challenge. 

Within the companies which are listed in the Nairobi Exchange we see a number of good opportunities for strong performance.  As a whole, Kenya’s listed companies are very well managed, and in many cases have high potential for growth.  In particular, on a recent trip to Africa we were impressed with a number of companies which produce cement, a necessary ingredient for infrastructure growth, as well as companies that serve the nation’s growing consumer demand.  Over the long term we believe many of these companies are trading at compelling valuations, and could be likely to perform quite well in coming years.

However, although economic growth and business performance has been strong in the past few years, we believe that in the short term the macroeconomic overhang in Kenya makes it challenging to find compelling opportunities.  On a macroeconomic level, the biggest story for Kenya’s economy in recent years has been inflation and currency depreciation.  As a country without substantial oil reserves, Kenya is a net importer of many goods, including petroleum products, food, and industrial materials.  As a result, it must maintain adequate currency reserves in order to cover the costs of goods coming into the country.  In recent years, the price of oil has risen substantially, driving up the cost of many of the products that Kenyans import and causing inflationary pressures.  This high demand for dollars in Kenya has resulted in the depreciation of the shilling against the US dollar.  For investors who are seeking opportunities in Kenya this depreciation is a particular challenge, as a gain in the stock market has the potential to be erased by exchange rate depreciation.  In fact, as you can see over the past three years the value of the Kenyan shilling (versus the US dollar) has decreased over 25%, and shares of the largest firms listed on the Nairobi Exchange are down over 30%.  


Going forward, we believe that there will be more depreciation to come for the shilling, as real interest rates remain negative, and inflationary pressure persists.  In addition, Kenya will hold elections in August of 2012, which could mean uncertainty for investors who remember the challenges of the 2007 election cycle.  Although a drop in oil prices has the potential to ameliorate some of this pressure, we think that the government will continue to raise rates in order to combat the rise in prices.  However, we also believe that the end of this cycle is getting closer, and as current yields converge with inflation, our interest in some of Kenya’s strongest businesses will continue to grow.  When this happens, we believe it would be a good entry point for some of the opportunities we find most compelling, and we will continue to watch for the right moment to invest.     

For more information about investing in Africa, please contact Nile Capital Management at (646)367-2820

We know Africa - from Cairo to Capetown.

The Case For Africa: Still Strong, Amid Global Challenges

Equity markets around the globe have been challenged this month, with concern over the United States’ spending policies driving headlines, and worries over European debt markets sending markets lower worldwide.  Notably, markets were shaken by continued trouble in Europe, as bad debts in the ‘PIGS’ (Portugal, Ireland, Greece, and Spain) are pointing to the necessity of future actions to stabilize the European monetary union.  Africa’s markets have reacted negatively in tandem with a global fall in equities, as rising fear has led to a broad flight to safety worldwide. 

In the short term, we believe that the situation in the Euro zone will need to be resolved in order to restore confidence to global markets.  We expect that the Euro zone will take further steps towards this end in the very near term, and believe that concern will be mitigated by the end of 2011.  This resolution could come in the form of a tight integration of fiscal and monetary initiatives among the EU; a breakup of the Euro, an increase in size in both the European Central Bank and European Financial Support Facility liquidity and guarantee programs; a restructuring of the debt of Greece, Italy, and Spain; or by any combination of the above.  In most cases, the short term growth outlook for the EU region is poor.

On the other hand, a leveling off of commodity prices from a growth slowdown in Developed Markets will improve real consumer spending power, supporting consumption in most economies, especially within Emerging Markets.  In fact, for a number of months we have believed that commodities were likely to be challenged in the short term as concerns over global growth rose.  Notably, concern over inflationary pressure stemming from high oil and food prices has been suppressing returns in Emerging Markets year to date, as consumers have been forced to use more of their income to purchase basic commodities.  Should that change, we would expect to see Emerging Market consumers increase their spending, which would be a positive sign for these markets.  In addition, we have already seen Emerging Markets across the globe – including many of Africa’s nations - raise interest rates in order to curb inflationary pressure.  However, we believe that the cycle of monetary tightening is coming to an end in the Emerging world, and that consumer spending will drive returns in the short term.  To that end, we believe the opportunity for investing in consumer goods, which we feel will prove protective during increased market volatility, has become more compelling.

In the longer term, we continue to believe that growth in Developed Markets will remain anemic over the coming years, as high debt levels, unemployment, and entitlement spending will make it difficult for sustained growth to occur.  On the other hand, Emerging Markets – most notably Africa – have demonstrated strong growth over the past few years, and are expected to continue their expansion over the coming decade.  Thus, investors who are seeking opportunities for growth should continue to seriously consider allocating capital to the continent of Africa.  We continue to see Africa as the best exposure to have among various investment options due to slowing growth in the US and other Developed Markets.  We also view Africa as favorable relative to other EM economies that may be overly dependent on US or EU growth.  We see the growth story in Africa as a secular trend, supported by increasing urbanization, rising real incomes, improved economic policies, and long needed large infrastructure investments.  We believe that once these changes have been kicked off, the process will continue to build on itself to create long term growth.  Although in the short term Africa’s markets have been challenged along with the rest of the globe, the long term investment opportunity makes this a compelling time to buy.

For more information about investing in Africa, please contact Nile Capital Management at (646)367-2820 or info@nilecapital.com.


We know Africa - from Cairo to Capetown.

Africa: Illuminating the 'Last Bastions of True Growth in the Emerging Markets'

In the June issue of Louis Rukeyser’s Mutual Funds, “the Rukeyser Interview” checked in with Nile Capital Management’s Larry Seruma, who discussed how the investment spotlight is shifting towards Africa to illuminate “the last bastions of true growth in the emerging markets.”

The interview highlights a number of reasons why we believe Africa is a compelling destination for investment capital.  It points to the fact that the valuations in Africa’s markets are compelling relative to US as well as other emerging and frontier markets.  Thus, on a relative basis, stocks which trade in Africa’s markets are at a significant discount to their global peers and could experience significant upside.

The article points out that the strong performance of Africa’s markets, noting that over the past ten years Africa’s markets have done significantly better than other emerging markets, with lower volatility.  In fact, Africa’s low correlation of returns intra-continent, as well as its low correlation to other global markets, means that adding an Africa only investment to one’s portfolio would have actually decreased volatility over the past ten years.  Thus, Africa potentially allows investors to gain additional exposure to emerging markets in their portfolio without having to take on additional risk.

In addition, the article points out that while the industrialized world is scrambling to find new sources for oil and other natural resources, investors will find that Africa’s substantial deposits will become ever more compelling in the global marketplace.  Thus, natural resources will present a sustained driver of economic growth in Africa for some time.

The interview also emphasizes that the demographics of Africa make it a compelling destination for investment capital.  It notes that Africa has a “swelling middle class” and a young population (40% of the population in Africa is under the age of 15), which means an increasing number of productive workers and an increasing consumer population (read here). As a result, the interview notes that Africa has an advantage over nations like the United States, where the population is older, and less poised for growth. 

Africa’s large and youthful middle class has and will necessitate strong and stable growth in banking, construction and infrastructure.  The article notes that both physical infrastructure and digital infrastructure are critical sectors to watch, highlighting that “Africa’s urbanization has led to a boom in new infrastructure building” for which “the main ingredient is cement.”  For Nile Capital Management, this presents opportunities in a number of names which provide building materials and construction services. 

At the same time, the article notes that “there are 1 billion people in Africa and more cell phone users on the continent than in the entire US market—but cell phone penetration is only 37 percent.”  Digital infrastructure is for many investors in Africa a touchstone, as it has seen remarkable growth in a relatively short period of time, and the industry remains poised for strong growth for years to come.

The article also highlights some specific investment opportunities which we find compelling, notably focusing on names in the infrastructure and consumer growth spaces.  It also reminds readers that while Africa offers incredible opportunities for investors, its economic and systemic diversity can make investing intricate.  Notably, Nile Capital Management often emphasizes that investing in Africa requires a detailed knowledge of the diverse countries and sectors which make up the investment landscape, and is best suited for investors with a long time horizon.  Although there is substantial potential for investors on the continent, these barriers make it more prudent for investors to seek managers who understand the investment landscape and can effectively manage risk. 

To read the full interview, please click here.

For more information about investing in Africa, please contact Nile Capital Management at (646)367-2820 or info@nilecapital.com.

Nile Capital Management: We know Africa - from Cairo to Capetown

Ernst & Young Says: It’s time for Africa

In a report recently released by Ernst & Young, the global accounting firm has predicted that foreign direct investment in Africa could reach $150 billion by 2015 (from $84 billion in 2010).  The report noted that Africa is becoming increasingly attractive as international investors seek new opportunities for growth, and pointed out that “while Africa’s challenges are well documented, there is an increasing recognition that the continent is on an upward trajectory; economically, politically, and socially.”

The report most notably highlights a study of the perception and outlook of a panel of 562 decision makers from around the globe.  The individuals surveyed where, according to E&Y were “divided into six main sectors” and “representative of the key African and global economic sectors,” these sectors are:

industry/automotive/energy

services, consumer products

raw materials

real estate/construction

hi-tech/telecom

The results of this survey are quite telling.  Of those surveyed, 86% said that they believed Africa has become more attractive over the past three years – greater than the 66% increase for Asia, and 45% and 38% respectively for Europe and North America.  In addition, 88% of respondents believe that Africa will become more attractive over the next three years, versus 79% for Asia, 53% for Europe, and 60% for North America.

Of perhaps even greater interest is the perception of Africa going forward.  88% of survey respondents claim that over the next three years they believe Africa’s attractiveness will improve.  In contrast, only 60% of respondents believe North America will become more attractive in the next three years, and 53% believe Europe will.  Even Asia lagged Africa, with 79% of respondents believing it will get better, but 18% expecting it to not change (compared with 8% for Africa).

Finally, the survey also attempted to quantify respondents’ intentions for business in the continent, with similarly upbeat results.  Of those surveyed, 43% said that they plan to invest in Africa in coming years, and an additional 19% plan to maintain operations. 

Of course, 29% of respondents also said that they have no plans in coming years to invest in the continent.  Common concerns amongst these respondents focused on the political, regulatory, and social environment, as well as infrastructure challenges and difficulty accessing customers.  These of course do remain valid concerns, however we believe that these barriers have steadily shifted downwards, and will continue to do so. 

For example, we believe that urbanization is a natural catalyst for entry into new consumer markets (read more here).   As the population of Africa’s cities swells, they become increasingly compelling markets for firms looking to establish a presence on the continent.  Infrastructure can be a concern (read here), however we have seen substantial progress made there as well, as well as opportunities for investment in further infrastructure development. 

Political challenges of course remain.   It is often easier to discuss Africa as a compelling investment broadly.  However, the true opportunity lies in understanding the diversity of Africa’s myriad nations and capital markets, and actively seeking compelling investments within them.  In Africa’s 53 nations and 24 capital markets there are a spectrum of opportunities and challenges to understand and manage.  However, the perception of Africa broadly having an ‘unstable political environment’ unfairly lumps the good with the bad.  This of course presents an opportunity for Nile, as we focus on investing in select countries where we see the best risk/reward ratios.  It is also an attitude that many not necessarily persist.  As the opportunity for investing in Africa’s various nations becomes more fully understood, we expect the proportion of firms who invest in the continent to continue to rise.  

For more information about investing in Africa, please contact Nile Capital Management at (646)367-2820 or info@nilecapital.com.

We know Africa - from Cairo to Capetown.

BRIC Becomes BRICS – South Africa as a Gateway to the Continent

Recently, South Africa has been in the news for its invitation to the third summit meeting of the BRIC club – a group named after its members’ initials (Brazil, Russia, India, China) which for many investors has represented the most compelling opportunities in Emerging markets over the past decade. The invitation of South Africa changes this group to the BRICS, and represents a diplomatic victory for President Jacob Zuma.

However, the invitation left some scratching their heads, as South Africa’s relative size and growth makes it a less significant player in the global market than its larger companions. South Africa’s population is estimated to be around 50 million residents – a substantial number, but only enough to make it the 25th largest country by population. In comparison, Russia has 139 million residents, Brazil has 203 million, India has 1.2 billion, and China has 1.3 billion – all substantially more than South Africa alone. The economies of the original BRIC countries are also substantially larger – Brazil and Russia’s GDPs exceed $2 trillion, India’s exceeds $4 trillion, and China’s is approaching $10 trillion. South Africa’s economy is comparably small at just over $500 billion, and is expected to grow at a relatively modest rate in coming years.

Given all this, including South Africa as a ‘BRIC’ economy on its own may seem counterintuitive, especially when countries like Mexico, Turkey, or even Indonesia are larger on a population and GDP basis. However, we believe South Africa’s inclusion makes absolute sense, as South Africa is an excellent gateway for investment across Africa as a whole.

Many investors agree that the opportunity for investment in various sectors and economies across the continent is substantial. However, we often hear that barriers to entry for businesses in Africa are typically high. At times, companies that see opportunity in Africa face legal and logistical challenges in establishing and maintaining operations as well as building markets for their products in Africa’s various (and varied) economies. In order to combat this challenge, many companies are choosing to work through South Africa in establishing a presence on the continent.

Take for example the recent purchase of Massmart by Wal Mart. Wal Mart has chosen to establish a presence in Africa via an existing firm in order to take advantage of its experience in the South African market. However, from an investor’s perspective the opportunity for Wal Mart is not limited to South Africa. Rather, Massmart is a compelling acquisition because it is well positioned to expand into the remainder of the continent. As we have previously written, the opportunity for retailers to tap into Africa’s growing consumer class is substantial, and firms that are able to be at the forefront of the trend could see substantial rewards. Many South African firms are thus positioning themselves as market leaders in telecommunications, banking, retail, and other industries where growth is expected to be strong.

In addition, South Africa is often used as a base for natural resource firms which operate in other parts of the continent. South Africa’s regulatory environment is well developed and transparent, and often serves as a good base of operations. In fact, recent tax law changes in South Africa have demonstrated the country’s desire to be a gateway to the rest of Africa. In many ways South Africa’s regulatory environment is more similar to that of the developed world than its fellow BRIC economies. As a recent Ernst & Young study indicates, many investors’ perception of the various large economies in Africa strongly favors South Africa for its attractiveness - 59% of the survey’s respondents see South Africa as the ‘most attractive’ country for investment in the continent.

In addition, it should not be overlooked that the invitation for South Africa was a strategic decision by the other BRIC members. As trade between emerging markets (the so called south-south link) increases, the original BRIC members want to be perceived as open and welcome to South Africa, and the rest of the continent. Because South Africa is currently Africa’s largest market, it is often involved in the preponderance of these south-south flows. Thus, including South Africa in the BRIC club is a sign that the other members want to do business with the continent.

Therefore, while South Africa viewed independently may not seem like an opportunity which is comparable to the other BRIC economies, Africa as a whole is an opportunity on the same scale as India or China. It’s inclusion in the BRIC club is thus a harbinger of Africa’s growing role in the Emerging Markets, and its importance for Emerging Market investors.

Investment News Highlights Africa’s Remarkable Returns and Low Volatility

A pair of recent articles in Investment News’ magazine have again highlighted the opportunity in Africa for investors seeking strong returns with low volatility. In the first, found here (free subscription required to view) the author notes that investors might be surprised by the “remarkable returns” and “low volatility” that Africa has seen over the past decade, and points out that:

“Over the 10-year period through December, the Africa Composite Index produced an average annual return of 17.3%, with volatility as measured by standard deviation of 11.9%.

By comparison, the MSCI Emerging Markets Index over the same period had an annualized return of 13.2% with a standard deviation of 24.7%.

The S&P 500 over the same period had a negative annualized return of 0.5%, with a standard deviation of 16.4%.”

The article also highlights opportunities in commodities, noting that “the continent contains 13% of the world’s oil reserves, 50% of proven gold reserves, 50% of iron ore reserves, 60% of cobalt, and 90% of platinum group reserves.” Consumer growth and infrastructure are also mentioned as strong investment opportunities.

The second article (found here) notes that “although all the usual preconditions and warning related to risk apply here, there is no denying the market’s allure” It also points out that:

“Some market analysts already have started lumping Africa in with the emerging BRIC economies of Brazil, Russia, India, and China. In fact, Goldman Sachs Asset Management chairman Jim O’Neil, who is credited with coining the BRIC term, is among those who think that African nations could surpass Brazil and Russia as the next hot emerging markets.”

In both articles the opportunity for investing in Africa is very favorably presented, with one even speculating that Africa could be the next Asia for investors.

In the view of Nile Capital Management, a key message in each of Investment News’ articles is what a surprise Africa may seem to be. At Nile Capital Management we have been analyzing Africa’s growth, and have been aware of the opportunity for investors for some time. However, much of the investment community is still learning about how compelling investment in Africa could be. This to us makes the opportunity for investing in Africa even stronger, as increasing awareness is likely to drive up valuations. This will be beneficial for investors who are involved on the continent already.

In fact, Investment News points out that:

“Part of the valuation appeal at the individual company level is due to the limited coverage of African stocks by Wall Street…Because Africa is so poorly covered in the media, most investors probably would be surprised to learn that there are more than 100 companies on the continent whose annual revenues exceed $1 billion. What’s more, Africa is home to nine of the world’s 15 fastest-growing countries.”

However, as investors come to understand the opportunity for investing in Africa, it will be important for them to select the most compelling stories across the continent. For example, although there are over 2,000 equities listed across Africa’s 24 public markets, Nile Capital seeks to invest in somewhere between thirty and forty of them at any time.

Nile Capital Management’s research team looks across the continent for investments which trade at a compelling values and have strong long-term growth prospects. This active selection process means we seek to invest in what we deem to be the ‘best’ opportunities on the continent. We therefore believe that the selection of what we see as the best opportunities in Africa will help investors share in Africa’s growth while managing risk.

As interest in investing in Africa continues to gain momentum, Nile hopes to remain poised to assist long term investors look for returns on the continent. Articles such as these simply help reinforce what we believe: there are substantial returns to be made in Africa, and we seek to participate in the opportunity.

For more information about investing in Africa, please contact Nile Capital Management at (646)367-2820 or info@nilecapital.com. We know Africa - from Cairo to Capetown.