Porsche Aims to Enter Africa

Bloomberg.com reports today that as part of its growth strategy Porsche AG is looking to enter 15 new countries before 2020, mainly in Africa. Porsche's global sales chief Bernhard Maier said, "We're covering new markets where we have not been in yet"  Follow this link to Bloomberg to get the full story. 

Nile Capital Management

We Know Africa: From Cairo to Cape Town

For more information please call 646-367-2820 

Kenya's Economy Seen as Resilient to Mall Attack in Nairobi

(Source: Bloomberg)

Security worries are nothing new in Kenya and so the country is unlikely to see long-term investors pull money out after the deadly attack on a Nairobi shopping mall. Click through this link for more from Reuters.
Several key points to keep in mind:
1) Recent elections were transparent, and cemented Kenya's political stability.
2) Tourism accounts for only 10% of Kenya's total GDP, and at this time no travel advisories have been issued.
3) The Kenyan market's reaction was a slight, approximately 30 basis point pullback.
4) The Kenyan shilling has remained stable (see chart above).

Nile Capital Management

We Know Africa: From Cairo to Cape Town

For more information please call 646-367-2820 

John Deere Focuses on Africa for Growth

"Greater political and economic stability and a push by some nations for food self-sufficiency has made the continent more attractive, says Ganesh Jayaram, Deere vice president of agriculture and turf sales and marketing for Asia and Africa. Follow this link to get the full story from Bloomberg.

Nile Capital Management

We Know Africa: From Cairo to Cape Town

For more information please call 646-367-2820 

More on Egypt

From ThinkAdvisor.com:

The volatile situation in Egypt is headline news and is changing rapidly with very little clarity on what the final outcome will be, and when it will be. And yet despite all that’s going on, the Egyptian stock market has remained almost eerily stable. While there has been some weakness, of course, “the damage hasn’t been that great,” said Larry Seruma, chief investment officer and managing principal of Nile Capital Management in New York, a firm that invests throughout the Middle East North Africa (MENA) region, Egypt included, “and the weakness has been far less than one would have expected.”

Click through to read the entire article - As Investors Wait on Egypt to Settle, Africa Holds Up.

Nile Capital Management

We Know Africa: From Cairo to Cape Town

For more information please call 646-367-2820

Upgrade Nigeria to Emerging Market? Downgrade Egypt to Frontier Market?

No?  (OK, maybe only dropping Egypt out of EM is more likely.) In any event, consider the following...

Nigeria has surpassed Egypt as the second largest stock market in Africa – at least by market capitalization.  The Nigeria Stock Exchange market capitalization now stands at $72 billion compared to $32 billion for Egypt, and the average trading volume is $40 million per day versus $15 million, respectively.  Now this is just the market data – but other metrics are also favorable for Nigeria relative to Egypt, for example, increasing political stability. For more on Egypt's current turmoil click through to read Egypt's Market Regression from BloombergBusinessweek.

Nile Capital Management

We Know Africa: From Cairo to Cape Town

For more information please call 646-367-2820 

Where and How to Invest in Africa?

Again this morning I had the pleasure of speaking about investing in Africa with Bloomberg Radio's always inquisitive Tom Keene. Since I last spoke to Tom in June on his "Bloomberg Surveillance" broadcast, I've visited with corporate managers and toured company facilities in more than a few countries around the African continent, including Kenya, Tanzania, Uganda, Mozambique, Namibia, and South Africa.

This morning's discussion was in part an update as well as a continuation of our earlier discussion, albeit with more pointed questions about where and how to invest in Africa, and asset allocation guidance. Follow this link to the podcast to listen to the discussion in its entirety.

Nile Capital Management

We Know Africa: From Cairo to Cape Town

For more information please call 646-367-2820 

Nairobi Airport Damaged by Fire

Kenyan President Kenyatta visits the Nairobi airport on August 7 to check out the damage.

CNN update says some flights have now resumed at Nairobi's Kenyatta International Airport. Earlier today the airport suffered extensive damage and had been completely closed as a result of a massive fire that had engulfed the airport's international terminal.

At this point, there are no reports of injuries, and the extent to which the damage will negatively impact the tourism trade and the flow of imports and exports, even if minimal, is yet to be determined. 

For more details, click through to CNN, and the BBC.

Nile Capital Management

We Know Africa: From Cairo to Cape Town

For more information please call 646-367-2820 

Questions about Investing in Africa from Bloomberg Radio's Tom Keene and Ken Prewitt

This morning I had the pleasure of visiting with Tom Keene and Ken Prewitt at Bloomberg Radio's New York Studios. I had been invited on their show, "Bloomberg Surveillance," to talk with them about investing in Africa. Not surprisingly, they had done their homework and had some great questions. Click through to listen to the podcast, and then post a comment below to tell me what you think, or ask a follow-up question.

Nile Capital Management

We Know Africa: From Cairo to Cape Town

For more information please call 646-367-2820 

Chart of the Day

                                                                 (Source: Bloomberg)

South African Rand (Spot)

The Race for Africa Heats Up

In a recent speech at the Tokyo International Conference on African Development, Japanese Prime Minister Sinzo Abe announced a five-year commitment of public and private support pledging $3.2 trillion yen ($32 billion) to Africa.

Bloomberg reports that Africa's economic growth is luring Japanese exporters, while the government wants to tap the natural gas and oil there after the Fukushima disaster led to the closing of Japan's nuclear plants. In his speech Abe outlined policies to encourage investment by Japanese companies and support advances in health, education and agriculture. Today's pledge compares with publicly funded assistance of approximately $9.2 billion from 2008-2012. Follow this link to read the full article: Abe Offers $32 Billion to Africa as Japan Seeks Resources Access.

Nile Capital Management

We Know Africa: From Cairo to Cape Town

For more information please call 646-367-2820 

"As big as China, no doubt."

Bloomberg reports that SAP, the world's largest maker of business-management software, plans to accelerate its investment in Africa. Jim Hagemann Snabe, SAP's co-CEO, said recently, "If I look long term, probably Africa becomes the main driver...it's as big as China, no doubt." Follow this link to read the article in its entirety: SAP to Accelerate Africa Investment on China-Sized Opportunity.

Nile Capital Management

We Know Africa: From Cairo to Cape Town

For more information please call 646-367-2820

The New Lions of Africa

Rwanda's President Paul Kagame recently penned an op-ed piece for the Wall Street Journal to share his views on the trends in economic growth and improved governance that are changing the lives of Africans in many countries throughout the continent. Click through this link to read for yourself about Rwanda and the New Lions of Africa.

Nile Capital Management

We Know Africa: From Cairo to Cape Town

For more information please call 646-367-2820

Boom Time for African Bonds

“Risk premia across the world are getting repriced,” says Larry Seruma, chief investment officer of Nile Capital Management, which invests in Africa. “You have too much money searching for yield, and as safe assets become scarce in the developed world the money has ultimately started to flow to Africa.”

For more on the improving economics and capital markets in Africa, follow this link to read the entire Bloomberg Businessweek article, In Africa, It's Boom Time for Bonds.

Nile Capital Management

We Know Africa: From Cairo to Cape Town

For more information please call 646-367-2820

Investment in Africa Heating Up

Robust economic growth in sub-Saharan Africa has not been lost on graduates of The University of Chicago's Booth School of Business, many of whom are pursuing careers or investments on the continent. A Chicago Conversations panel discussion -- Investing in Africa --  held on the London campus of the school's Executive MBA Program last fall drew 200 attendees. For more on the Africa-focused ambitions and achievements of Booth grads, click through to read Investment in Africa Heating Up.

Nile Capital Management

We Know Africa: From Cairo to Cape Town

For more information please call 646-367-2820.

PIMCO's El-Erian: Africa's Rise is Real

In the recent May/June issue of Foreign Policy, Mohamed A. El-Erian, CEO and co-chief investment officer of global investment management firm PIMCO, writes about Africa's economy saying "Count me among the growing number of people excited and hopeful about what's happening on the ground in Africa. Markets are booming, and this time it's not just gold mines and oil rigs; it's a new generation of workers and entrepreneurs." "Still a cynic?," El-Erian asks, "Don't take my word for it -- just follow the money."

Follow this link to read the full article: Into Africa: Believe the Hype. Africa's rise is real.

For more information please call 646-367-2820.

Nile Capital Management

We Know Africa: From Cairo to Cape Town

P&G and the African Consumer

In a recent interview with CNN's Robyn Curnow, P&G VP Dimitri Panayotopoulos said, " We have businesses in Nigeria, in Kenya, Uganda Tanzania -- we are going to go to Angola and Ethiopa. We want to be in every country...Obviously there is a huge upside."

We couldn't agree more.

For more information please contact Nile Capital Management or call 646-367-2820.

Nile Capital Management - We Know Africa: From Cairo to Cape Town

Talking about Africa with Kathleen Hays

Yesterday I stopped by Bloomberg Radio's New York studios and had the pleasure of talking with Kathleen Hays on her Bloomberg Radio program "The Hays Advantage." Recognized as one of the top economic reporters in the country, Kathleen asked me, among other things, to talk about 1) why the investment climate in Africa is better now than ever before, 2) how our mutual fund achieved its performance in 2012, and 3) my outlook for Africa and our fund for 2013. We covered a lot of ground in a short period of time.
Good questions. Good discussion. Click through to listen to the podcast, and then post a comment (below) to tell me what you think, or ask a follow-up question. Let's talk...

FT coverage: Ascendant Africa

"There have been false dawns before but sub-Saharan Africa appears to be at a genuine turning point, with the business landscape being transformed by pan-African multinationals, the spread of mobile and foreign investment." - The Financial Times

Today marks Day 4 of The Financial Time's six-part series, Africa, Inc. So far, they have covered mobile money, cheaper cleaner energy, GE's ambitions in Africa, China's intentions, foreign investor interest, the sales of luxury goods in Lagos, and developments in Ghana, Kenya, Mozambique, Uganda, and more. The breadth, depth, and critical balance of the reporting is exemplary.
For anyone interested in the investment potential of the Pan-African markets, this series should prove to be most informative. Be sure to read Zambian economist Dambisa Moyo's contribution: Hunt for Alpha Leads to Africa.
('sounds a lot like our whitepaper The Hunt for Alpha in the Frontier, doesn't it? If you'd like a copy, send us an email at info@nilecapital.com, we would be happy to hear from you.) 

Africa is Essential to GE's Future



In his recent annual letter to shareholders, General Electric's Chairman & CEO, Jeffrey Immelt writes: "I recently returned from Sub-Saharan Africa, a region that was “off the radar” when I became CEO. Today, we are at a $3 billion annual run rate, and that could double in the next few years. GE could have “$1 billion Franchises” in Nigeria, South Africa, Mozambique and Angola. We are investing in capability and people. There are very few American companies in the region. But we could sell more gas turbines in Africa than in the U.S. in the next few years."
Immelt goes on to state that Africa is "essential" to GE's future.
Click through to read Immelt's letter for yourself and learn more about GE's commitment to be a leader in Africa.

This Ernst and Young infographic tells the story...

Zambian Economist Dambisa Moyo: China Can Transform Africa

In this recent CNN interview Zambian economist Dambisa Moyo talks about the important role China plays in the future of Africa. We can't disagree with those who have said of Dambisa, "She makes a compelling case for a new approach to Africa." 'Definitely worth watching this short video:

Special Report: Emerging Africa

The March 2, 2013 issue of The Economist features a Special Report: Emerging Africa, offering analysis and commentary on topics of interest to many investors including banking in Africa, the upcoming Kenyan election, Africa's bond market, Egyptian politics, and more. All 55 countries on the continent  -- some of the highest-growth economies on the planet -- are covered. For any investor interested in the potential of the Pan-African frontier markets, this issue should prove to be most informative. Follow this link to the lead story: Africa Rising, a hopeful continent.

For more information please contact Nile Capital Management at info@nilecapital.com or 646-367-2820.

Nile Capital Management - We Know Africa: From Cairo to Capetown.

Why QE3 Will Be a Boon to Africa’s Frontier Markets

We are pleased to offer for download Larry Seruma’s whitepaper, “Why QE3 Will Be a Boon to Africa’s Frontier Markets”.

On September 13, Federal Reserve Chairman Ben Bernanke announced a new monetary stimulus initiative that the media promptly dubbed “quantitative easing (QE3).” In addition to continuing its existing bond-buying program, the Fed said it would acquire $40 billion per month of mortgage-backed securities and “employ other policy tools” indefinitely, until the U.S. labor market improves.

This third round of QE will be more open-ended than the Fed’s first two rounds. It came at a time when: 1) interest rates already are at rock-bottom in the U.S.; and 2) developed markets and other central banks around the world are printing money at full throttle. Greatly diminishing investors’ desire to hold cash and currency, this third round of monetary stimulus could continue for years.

In this article, we will explain why frontier markets will be prime recipients of the powerful investment flows QE3 will set in motion. We will also focus on characteristics that will make selected frontier markets, especially sectors of Africa, more attractive for QE3-driven flows.

To download the whitepaper, please click here.

For more information please contact Nile Capital Management at info@nilecapital.com or 646-367-2820.

Nile Capital Management - We Know Africa: From Cairo to Capetown 

BusinessWeek on Africa's Frontier Markets

Last week Roben Farzad wrote a nice article on Larry Seruma's forthcoming paper, “Why QE3 will be a Boon to Africa’s Frontier Markets”, that you should go read (coming out soon).  The entire article has a lot of links to other articles and “a video” that make a compelling case of why Africa markets are likely to outperform as they benefit from capital flows, seeking higher yields and growth, into frontier markets.

For more information please contact Nile Capital Management at info@nilecapital.com or 646-367-2820.

Nile Capital Management - We Know Africa: From Cairo to Capetown 

Summer Updates On Africa Markets

Recently, Portfolio Manager Larry Seruma of Nile Capital Management has been featured in articles from Reuters, allAfrica.com, InvestorPlace, onwallstreet, and Investing Daily.

Ben Shepard of Investing Daily discusses the current state of various African economies and markets, foreign direct investment in Africa, and how global pressures affect African countries in “The Final Frontier of Investing: Africa”.

Tom Taulli of InvestorPlace looks at strong performers this year in "7 Surprisingly Good Funds in 2012".

Bill Hinchberger for allAfrica.com looks at the growth of private equity in Africa in “Africa:  Private Equity – New Cash for Expanding Businesses”.

David Lindorff of onwallstreet looks at top performing emerging market funds in “The New Emerging Markets: Africa and the Middle East”.

David Randall of Reuters interviews various emerging market fund managers including Larry Seruma of Nile Capital Management and gets their strategies for stock picking in emerging markets in “How to Play it – Emerging Markets Now a Stock Picker’s Market?”

For more information please contact Nile Capital Management at info@nilecapital.com or 646-367-2820.

Nile Capital Management - We Know Africa: From Cairo to Capetown   

The Street Notes Recent ‘Boost’ From Africa

A recent article from The Street notes the recent boost which investors have seen from funds which are invested in Africa and the Middle East, noting that many of the economies in these regions are ‘booming.’

The article highlights the fact that:

“Boosted by high oil prices, petroleum producers are enjoying some of the best results… In addition, consumer companies are achieving record sales as millions of people leave impoverished villages and join the urban middle class. In 2011, Sub-Saharan Africa grew 4.9%, and the World Banks says that the region should grow 5.3% this year.”

We at Nile Capital Management believe that this strong growth represents the ‘new normal’ for Africa for many years to come.  Given the dual economic drivers of natural resource demand and an expanding consumer class, we believe that the economic growth in many of Africa’s nations will remain strong. 

In addition, the article points out that:

“The recent strong showing of African stocks represents a big change from last year. Markets throughout the region plummeted early in 2011 as investors feared that the protests of the Arab Spring would spread and disrupt businesses. Stocks suffered again when the European crisis intensified in the summer, and investors lost their appetite for risky shares in the emerging markets. Lately the fears have dissipated as investors worry less about instability in Europe and the Middle East.”

2011 was undoubtedly a challenging year from a geopolitical perspective.  However, we continue to feel strongly that Africa’s growth trajectory remains unchanged, and that now is an excellent time to invest there.  In fact, it is interesting to note that the challenges that Africa’s markets saw in 2011 largely came from outside factors.  Despite that, growth in Sub-Saharan Africa in particular remained strong.

Finally, the article highlights a handful of opportunities which Nile Capital Management finds particularly compelling, especially from a valuation standpoint.  To read more about some of the value opportunities we see in Africa, please request a copy of our most recent White Paper “Digging Deeper into Valuations in Africa” from our research library.

For more information, please contact Nile Capital Management at info@nilecapital.com or 646-367-2820.

Nile Capital Management - We Know Africa: From Cairo to Capetown

Brazilian Firm Announces Largest Africa-Focused Private Equity Fund To Date

In recent articles in Forbes and the Wall Street Journal it was announced that Brazilian investment firm BTG Pactual is launching the largest private equity fund to focus on Africa to date.  With  a $1BN mandate, the fund expects to invest in areas such as infrastructure and energy, and will be open to domestic and international investors alike. 

This announcement comes on the heels of similar interest from firms like Helios and Carlyle, who have recently raised $900MM and $500MM funds respectively to focus on the continent.  These and other funds are indicative of the growing interest amongst the investment community in opportunities across Africa, and have positive implications for the growth of many key businesses and sectors – many of which we follow as well.

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 Cape Town

New York Times Highlights Looking to Frontier Markets for 'Next Big Thing'

A recent article in the New York Times ("Looking to Frontier Markets for Next Big Thing in Investing") has once again highlighted the opportunity which investors are noticing for investing in frontier markets in general, and Africa in particular.  The article notes that:

"The difficulty with investing in the next big thing is that it is often not recognized as that until after it has become a current or former big thing. Before its arrival, it tends to be seen only as a crazy, risky thing or nothing at all."

But also points out that:

"the case for the region and frontier markets elsewhere is precisely that they have just set out on the path to economic and social progress and still have a long way to go. That is the same journey made by the big emerging economies of today. It’s barely four decades since Chinese farms were decollectivized, for instance, and less than two decades since Brazilian inflation was running at more than 40 percent a month."

In addition, the article highlights the three themes which Nile Capital Management's team focuses on, noting that: 

"Whenever other investors decide to join them, there are three themes that fund managers expect to drive returns for years to come: growth of a middle-class consumer society, with all the products and services that are its trappings; production and export of natural resources; and development of infrastructure, including the transportation and communication networks required for the success of companies involved in the other two themes."

We would encourage you to read the article, which again can be found here.

For more information please contact Nile Capital Management at info@nilecapital.com or 646-367-2820.

Nile Capital Management - We Know Africa: From Cairo to Capetown   

Nile Capital Management Featured on CNBC: Africa is "Single Best" Equity Region

Larry Seruma, CIO & Managing Principal, Nile Capital Management LLC digs deeper into investing in Africa in a recent CNBC interview. He explains the difference between the valuation matrix of Africa's vast resources and that of other large countries like Russia and Canada. He also tells us why he's positive on the continent.

Click here to watch the interview.

For more information please contact Nile Capital Management at info@nilecapital.com or 646-367-2820.

Nile Capital Management - We Know Africa: From Cairo to Capetown