Download Africa – Opening the last frontier market

Africa – Opening the
last frontier market
January 2009
Africa – Opening the last frontier
market
Presentation to the Securities &
Investment Institute – CPD Seminar
29 January 2009
Dr Ayo Salami
2
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3
Africa
Moving from promises to results
“Africa is indeed on the move. In contrast with the 1990s, conflicts in Africa have
declined, economic performance has improved and some clear ‘high performers’ are
beginning to emerge.”
World Bank 2006
“Africa has learnt to trade more effectively with the rest of the world, to rely more on the
private sector, and to avoid the very serious collapses in economic growth that
characterized the 1970s, 1980s and even the early 1990s.”
World Bank 2007
“Since 1995 there has been at least one African equity market among the top 10 best
performing markets in the world. Last year (2007), it was Zambia, posting gains of 127%
in US dollar terms. Joining Zambia among the best performing markets was Malawi (up
114%), Cote D’Ivoire (up 105%) and Nigeria (up 90%). In 2006, Malawi was the best
performing stock market in the world posting gains of 129% in US dollar terms.”
African Business Research Limited (2008)
4
Why invest in Africa?
Africa
A Lie by Omission
5
Misconceptions about Africa
The view from abroad :
Investing in Africa is risky
The region is a basket case that is politically unstable
Regulations are insurmountable
There are no investment opportunities
6
Africa in Perspective
Global Land Mass and Proportion of World’s Resources
Square Miles:
China
3,705,390
United States 3,618,770
India
Europe
Argentina
Proportion of global
resources in Africa:
Land Mass
20%
Diamonds
90%
Gold
50%
Phosphate
90%
Platinum
40%
Petroleum
8%
Natural Gas
12%
1,266,595
1,905,000
1,065,189
New Zealand 103,736
Total
11,664,680
Africa
11,707,000
Source: Academic Centre for Education Development
Source: Ayittey, George B.N. Africa Betrayed, 1993, Palgrave Macmillan , ISBN: 0312104006
7
Political Overview
Wind of change blowing across Africa – declining political risk
Circa.1980
Current
Source: Duet, African Business Research
8
Macro Overview
12 consecutive years of growth in real per capita CDP
Population and GDP Growth (Sub-Saharan Africa ex South Africa)
Since 1995, Real GDP
grow th has exceeded
population grow th
6.0%
5.0%
4.0%
3.0%
2.0%
1.0%
0.0%
-1.0%
-2.0%
-3.0%
Population (grow th)
Grow th in real GDP
2008E
2007E
2006E
2005
2004
2003
2002
2001
2000
1999
1998
1997
1996
1995
1994
1993
1992
1991
1990
1989
1988
-4.0%
Grow th in real per capita GDP
Source: World Bank Data
9
Macro Overview
African growth is now among the highest in the world
GDP Growth across the world
12
% Change Real GDP
10
8
6
4
2
0
2000
2001
2002
2003
2004
2005
2006
2007
2008
World
G7 Countries
Sub-Saharan Africa
Developing Asia
Middle East
Newly Industrialised Asia
Source: World Economic Outlook Database October 2008
Macro Overview
Slower growth but NO recession
GDP Growth forecast across the world (2009-2011)
10
% Change in Real GDP
9
8
7
6
5
4
3
2
1
0
Developing Asia
Sub-Saharan
Africa
Middle East
2009
Source: World Economic Outlook Database October 2008
New ly
Industrialised Asia
2010
2011
World
G7 Countries
Macro Overview
Some out-performing economies
2009 – Forecast growth in Real GDP
Angola
12.8 %
Sudan
7.7%
Nigeria
8.1%
Uganda
8.1%
Mozambique
6.7%
Rwanda
5.6%
Botswana
4.6%
Equatorial – Guinea
4.6%
Source: World Economic Outlook Database October 2008
Macro Overview
Sound monetary policies ….
Deficit as % of GDP
10.0
6.5%
8.0
6.0
4.5%
4.0
2.5%
2.0
0.5%
0.0
-2.0
-1.5%
Budget deficit (US$bn)
12.0
8.5%
-4.0
Budget Deficit (US$ billions)
2004
2003
2002
2001
2000
1999
1998
1997
1996
1995
1994
1993
1992
1991
1990
-6.0
1989
-3.5%
Deficit Including Grants as % of GDP
Deficit Excluding Grants as % of GDP
Source: World Bank data
13
Macro Overview
… have controlled money supply and reduced inflation
25.0%
30.0%
25.0%
20.0%
Inflation (%)
15.0%
15.0%
10.0%
5.0%
10.0%
0.0%
Money supply (%)
20.0%
-5.0%
5.0%
-10.0%
0.0%
-15.0%
2009E
2008E
2007E
2006E
2005
Growth in money supply
2004
2003
2002
2001
2000
1999
1998
1997
1996
1995
1994
1993
1992
1991
1990
1989
1988
Year-On-Year % in price index
Ratio of money supply to GDP
Source: World Bank data
14
Macro Overview
30.0%
120.0%
25.0%
100.0%
20.0%
80.0%
15.0%
60.0%
10.0%
40.0%
Debt service to exports ratio
2009E
2008E
2007E
2006E
2005
2004
2003
2002
2001
2000
1999
1998
1997
1996
1995
1994
1993
1992
0.0%
1991
0.0%
1990
5.0%
1989
20.0%
External Debt as % of GDP
140.0%
1988
Debt Service to Exports Ratio (%)
External debt is becoming sustainable
External debt as % of GDP
Source: World Bank data
15
Macro Overview
With a little help from our friends in China
16000
As the Chinese economic
resurgence has proceeded,
Africa has become more
important for China as a
source of the raw materials
needed by the Chinese
manufacturing sector.
14000
US Dollar millions
12000
10000
8000
African economies, in
particular oil and
commodity producers have
benefited substantially from
China’s demand for raw
materials
6000
4000
2000
0
2004
2003
2002
2001
2000
1999
1998
1997
1996
1995
1994
1993
1992
1991
1990
China Imports from Africa
The historical trade deficit
with China’s has now
become a surplus
China Exports to Africa
Source: WTO Direction of trade statistics
16
Correlation with other global markets
Low correlation with other global markets offers
diversification opportunities
Correlation matrix between regional equity markets
Africa (ex South Africa)
Asia
Emerging markets
Far East
G7 Countries
Latin America
South Africa
World Index
World Small Companies
Africa
Asia
100%
-9%
100%
-7%
88%
-10%
99%
12%
18%
-14%
6%
3%
42%
14%
21%
14%
22%
Emerging
markets
100%
86%
43%
44%
58%
46%
46%
Far East
G7 Countries
100%
17%
5%
40%
20%
21%
100%
57%
22%
99%
90%
Latin
America
100%
7%
57%
46%
South
Africa
100%
24%
28%
World
Index
100%
90%
World Small
Companies
100%
Correlation coefficients based on daily equity returns between 1/1/2000 and 29/09/2006
Source: MSCI, African Business Research
17
African Equity Markets
From Cape to Cairo
There are 22 stock exchanges in Africa
with a combined market value of
US$480.1 billion and 2,072 listed
equities
Number of
Market Value listed companies
Sub-Saharan
Africa (ex –SA)
$79.7 bn
533
South Africa
$228.3 bn
427
North Africa
$172.1 bn
1,112
Data as at 31 December 2008
18
Trading and settlement
Love thy neighbour – but don’t take counterparty risk
Country
Trading system
Settlement cycle
Central
depository
Algeria
Botswana
BRVM
Cameroon
Cape Verde
Egypt
Electronic
Call over
Electronic
t+5
t+5
t+5
Yes
yes
Yes
Electronic
t+2 for active shares
t+3 for dematerialised shares
t+4 for physical shares
Yes
Ghana
Kenya
Malawi
Mauritius
Morocco
Mozambique
Namibia
Nigeria
South Africa
Sudan
Swaziland
Tanzania
Tunisia
Uganda
Zambia
Zimbabwe
Call over
Electronic
Call over
Electronic
Electronic
t+3
t+5
t+7
t+3
t+3
yes
Yes
yes
Yes
yes
Electronic
Electronic
Electronic
t+3
t+3
t+3
Call over
Electronic
Electronic
Electronic
Call over
Call over
t+5
t+3
t+3
t+5
t+5
t+7
Yes
yes
12 countries (94% of the stock
markets – ex South Africa)
have electronic and automated
trading platforms. More
countries are already planning
a switch over.
Also more markets are moving
towards the international
standard of t+3 settlement
cycle
yes
yes
yes
19
Natural Log of market size (US$ million)
$3.1 bn
6
$1.9 bn
$2.2 bn
$0.6 bn
$0.1 bn
$0.12 bn
$3.5 bn
$3.5 bn
$4.8 bn
$2.3 bn
8
$0.5 bn
10
$0.8 bn
$9.2 bn
$46.7 bn
$59 bn
$108.3 bn
12
$5.3 bn
14
$228.2 bn
Size matters ?
Market values of stock exchanges in Africa
Jumbo
Large
Medium
4
Small
2
0
Mozambique
Swaziland
Namibia
Uganda
Tanzania
Malawi
Zambia
Ghana
Zimbabwe
Botswana
Mauritius
Tunisia
Cote D'Ivoire
Kenya
Nigeria
Morocco
Egypt
South Africa
Data as at 31 December 2008
20
There is a good distribution of economic sectors
 Jointly, banks, telecoms, construction and consumer goods companies
represent 70% of the total capitalisation of sub-Saharan African equity markets
– ex South Africa.
30.0%
25.0%
 One of the least known open secrets of the investment world is that African
banks are among the most profitable in the world with average ROE above
30%.
20.0%
 The high proportion of telecom companies reflects Africa’s status as the
fastest growing telecoms market in the world. The average mobile phone user
in Nigeria spends US$22 per month – nearly double that of a Chinese user.
15.0%
10.0%
5.0%
0.0%
Aerospace
Media
Services
Info Technology
Autos
Consumer Goods
Mining
Transportation
Retail
Manufacturing
Health
Agriculture
Chemicals
Finance
Insurance
Entertainment
Conglomerates
Oil and Gas
Food
Real Estate
Construction
Telecom
Banks
Africa (ex South Africa)
Data as at 31 December 2008
21
African equity markets – Great returns
Annual returns to Sub-Saharan Africa equity markets (ex – South Africa) over 1999 – 2008
70%
50%
30%
10%
-10%
-30%
-50%
Average
2008
2007
2006
2005
2004
2003
2002
2001
2000
1999
Average annual returns of 9% (in US$) over the last 10 years from Jan. 1999 to
December 2008, relative to 6.6% for emerging markets, -2.5% for G7 countries, 3.7 for
global small companies and -2.2% for the All Global equity markets.
Source: Local Stock Exchanges, African Business Research
22
Equity returns among the best in the world
Average annual returns to various regions (1999 to 2008)
12%
10%
8%
6%
4%
2%
0%
G7
Countries
Far East
Asia
SubSaharan
Africa
South Africa
Eastern
Europe
Latin
America
-4%
Emerging
Markets
-2%
Source: MSCI, African Business Research
23
2008 – One for the history books
65.00%
45.00%
25.00%
5.00%
-15.00%
-35.00%
-55.00%
-75.00%
MSCI World
Index
MSCI G7 Index
MSCI Asia
MSCI Latin
America
MSCI Eastern
Europe
MSCI Frontier
Markets
MSCI Emerging
Markets
Sub-Saharan
Africa
Volatility
Returns
2008 – Down but not out!
30%
20%
10%
0%
-10%
-20%
-30%
-40%
-50%
-60%
Average
Nigeria
Kenya
Mauritius
Zambia
Botswana
Uganda
BRVM
Namibia
Swaziland
Ghana
Malawi
2008 – RIP
A terrible year for everyone
 Africa was not spared the carnage in the international financial markets
 Larger markets like Nigeria, Kenya, Mauritius were hit by international emerging market funds
struggling to cope with redemptions
 Smaller markets held up well, but at the expense of reduced liquidity
 Nigeria’s fall was compounded by the unresolved issue of margin-lending from the banking
sector
 Performance of the financial markets did not reflect corporate earnings news flow. Average
EPS growth for 2008 was 32%
Lose on the currency swing
Gain on the growth roundabout
Sub-Saharan Africa equity returns in US$ since 1999 (excluding South Africa and Zimbabwe)
330%
Cumulative $ returns (%)
15%
Despite currency
depreciation,
cumulative $returns
are positive averaging
9% per annum
280%
10%
5%
230%
0%
180%
-5%
130%
-10%
80%
30%
-15%
-20%
-20%
2008
2007
2006
2005
2004
2003
2002
2001
2000
1999
Annual % loss on currency
Annual % loss on currency
380%
Cumulative $ returns
Source: Local Stock Exchanges, African Business Research
27
Trading Liquidity
Spreading equity culture reflected in rising turnover
34.0%
29.0%
20.00
24.0%
15.00
19.0%
10.00
14.0%
5.00
Turnover Ratio (%)
Annual Traded Volume (US$ billion)
25.00
Annual traded
volume has
increased by
25x since 2000
9.0%
-
4.0%
2000
2001
2002
2003
2004
Annual Traded Volume
2005
2006
2007
2008
Turnover ratio
Source: Local Stock Exchanges, African Business Research
28
What about volatility?
“Give a dog a bad name”
Standard deviation of annual returns (1999 – 2008)
60%
51%
50%
41%
40%
40%
38%
38%
37%
34%
33%
30%
27%
23%
20%
10%
0%
The risk from
investing in Africa
is similar to that of
other emerging
markets.
G7 Countries
World Small
Companies
Sub-Saharan
Africa
South Africa
Far East
Emerging
Markets
Asia
Eastern
Europe
Latin America
North Africa
The perception
that Africa is
inherently riskier
is not supported
by data
Source: MSCI, African Business Research
29
Risk – Return Ratio
How “Sharpe” is that?
35.0%
30%
29%
27%
27%
26%
30.0%
25.0%
17%
20.0%
Sharpe ratio for
Sub-Saharan Africa
is 1.5x better than
for emerging
markets generally
14%
15.0%
12%
10%
10.0%
5.0%
0.0%
-5.0%
-10.0%
-11%
-15.0%
G7 Countries
Far East
Asia
World Small
Companies
Emerging
Markets
Eastern
Europe
Sub-Saharan
Africa
Latin America
North Africa
South Africa
Source: MSCI, African Business Research
30
Risk of Loss
You think I am a loser, wait till you meet my siblings
Number of losing months (Jan 2000 to December2008, 108 Months )
60
52
51
60%
50
50
48
44
41
50%
40
40
40%
30
30%
20
20%
10
10%
0
0%
Latin America
Emerging
Markets
Number of losing months
Eastern
Europe
SSA (exSouth Africa)
Far East
Far East
G7 Countries
Asia
Source: MSCI, African Business Research
Risk of loss
Number of losing months
50
Risk of loss
Risk of Loss for Africa is similar to other regions of the world
31
Historic Value At Risk
Always look on the bright side of life
25%
20%
15%
10%
5%
0%
-5%
-10%
-15%
-20%
-25%
Eastern Europe
Latin America
South Africa
Emerging Markets
Far East
Asia
Africa (ex South
Africa)
G7 Countries
World Index
Low est Monthly Return
Highest Monthly Return
Outside the developed world, Africa has the lowest Historic VAR
Source: MSCI, African Business Research
32
Risk and Performance
The linear relationship predicted by the CAPM does not appear to hold in
Africa - similar result has been found in other markets.
Annual returns to risk segments (2000 - 2007)
200%
150%
100%
50%
0%
-50%
2000
2001
2002
2003
High Beta
2004
Medium Beta
2005
2006
2007
Average
Low Beta
Source: Local Stock Exchanges, African Business Research
33
Risk and Performance
Although the linear relationship between risk and return is violated, risk is
still a statistically significant determinant of returns.
Results from Annual regression of returns against Beta (2000 – 2007)
Year
2007
2006
2005
2004
2003
2002
2001
2000
1999
Combined
Source: Duet Asset Management
Intercept Beta
T-Stat
R-Squared Num of Obs
1.601
-1.637
-4.74
6.75%
313
1.972
-1.293
-3.80
4.67%
275
0.435
0.003
0.03
-0.36%
279
0.168
0.066
0.75
-0.17%
256
0.345
-0.069
-0.79
-0.12%
329
0.471
0.330
2.31
1.34%
322
-0.035
0.154
2.80
2.10%
319
0.070
-0.043
-0.59
-0.22%
297
-0.049
0.174
2.25
1.49%
271
0.508
-0.203
-2.98
0.30%
2636
Red indicates statistically significant relationships
34
Size and Performance
Small firm effect found in other markets is also present in Africa
Annual returns to size segments (2000 - 2007)
150%
130%
110%
90%
70%
50%
30%
10%
-10%
-30%
2000
2001
2002
2003
2004
Large
Medium
2005
2006
2007
Average
Small
Source: Local Stock Exchanges, African Business Research
35
Risk and Size
Paradoxically – smaller companies have consistently lower betas relative to
large companies
Beta for size segments (2000 - 2007)
Annual returns to risk segments (2000 - 2007)
1
0.9
0.8
0.7
0.6
0.5
0.4
0.3
0.2
0.1
0
2000
2001
2002
2004
2003
Large
Medium
2005
2006
2007
Average
Small
Source: Local Stock Exchanges, African Business Research
36
Investment strategies
Key sectors for equity investors
• Banks
• Telecoms
• Breweries
• Construction and cement
• Consumer goods
Increasing number of investment vehicles are becoming available. In the last 3
years about 10 new Africa focused funds have been launched
Research can be challenging but fun
Dynamics of economic reform
We believe Africa is
positioned here on
the growth curve
Africa is just beginning to
realise the benefits of the
economic restructuring of the
1990’s.
Expected Output
Total output
X
Private sector output
Public sector output
Cost of input
Source: Olivier Blanchard; The Economics of Post-Communist Transition
Africa has had the pain, the
gains are about to become
evident
15 years ago, Africa would not
have been able to cope with a
doubling of energy prices.
Despite recent doubling of oil
prices few African countries
have required balance of
payments support from the
IMF.
The continent is less
vulnerable to external shocks.
38
Would you invest in these countries?
A country recently endured a long and bloody civil war, the
assassination of its president, a financial panic and an influx of
poor immigrants
United States
of America
A country formed from the ruins of a vanquished army forced
from its historic homeland to a small barren island
Taiwan
A country divided after a long and destructive civil war and
still technically at a state of war
Korea
A country that started a regional war, suffered a humiliating
defeat, heavy bombing that destroyed its infrastructure and
without a history of civil liberties or democratic government
Japan
39
Duet: Who are we?
We are farmers not hunters
DUET GROUP
Overview
•
Duet Group is a client-focused financial group specialising in Alternative Asset Management that is
dedicated not only to generating superior investment returns, but also to delivering risk
management, transparency and client service required by sophisticated investors.
•
Duet Group was founded by Henry Gabay & Alain Schibl in June 2002 in London.
•
Osman Semerci joined Duet Group in April 2008 as Chief Executive Officer and Managing Partner.
•
As of 1st July 2008 Duet Group has USD 1.8 billion of equity under management.
41
DUET GROUP
Values and Principles
•
Duet’s primary focus is its client’s needs. It strives to understand their individual investment
objectives.
•
Values such as integrity, fairness and transparency ensure its reputation. Through these
qualities it looks to build solid, long-lasting relationships with its clients.
•
Through commitment and respect to its people Duet aims to create a close, collegial working
environment. This is essential to produce optimum results from its individual team members
and thus determines its overall success.
•
Duet’s commitment to excellence ensures that they approach each task in hand with
professionalism and dedication.
42
DUET GROUP
Group Structure
Duet Asset Management
Duet Private Equity & Real Estate
Duet Financial Products
Hedge Funds
BR.I.T Platform
Structured Products
Duet Multi Strategy
SLCDO 1
Duet Global Opportunities
Brazil: ITACARE Real Estate Fund
Duet Convertibles
Duet Special Situations
India: SARE South Asia Real Estate
Fund
Astor Duet Managed Futures
India: Duet India Hotels Fund
Duet Global Macro
Turkey: Duet Golden Horn Real Estate
Fund
Fund of Funds
GSAH Optimum
Long Only Funds
Duet Victoire Africa Index Fund
Duet Real Estate
Duet Luxury Hotel Fund I
Duet Private Equity
Capital Markets
Placement Agent
Corporate Finance
DPEL 1
43
DUET GROUP
Operating Model
Alain Schibl
Henry Gabay
Osman Semerci
Founding Partner & Co-Chairman
Founding Partner & Co-Chairman
Managing Partner & CEO
Trading
Private Equity
Financial Products
Hedge Funds
Real Estate
Investor Relations
New Business Development
Marketing
CFO
Risk Management
44
Compliance
Operations
Technology
44
DUET GROUP
Funds

Duet Asset Management is authorised and regulated by the FSA and is registered as an
Investment Advisor with the SEC.

Duet’s mission is to become the leading provider of absolute return investment strategies to
sophisticated investors. Each strategy aims to deliver risk-adjusted absolute returns
uncorrelated to broad market indices.

Duet integrates its Investment Managers through a common infrastructure and economic
alignment based on shared equity ownership. The alignment of incentives is critical to
achieving sustainability, team collaboration, developing and retaining quality people and
building
a long-term franchise value.
Duet Asset Management Ltd is the Investment Manager of:
Hedge Funds
 Duet Multi Strategy
Long Only Funds
 Duet Victoire Africa Index Fund
Fund of Funds
 GSAH Optimum
 Duet Global Opportunities
 Duet Convertibles
 Duet Special Situations
 Astor Duet Managed Futures
 Duet Global Macro
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Duet Victoire Africa Index Fund
The fund seeks to replicate the performance of a proprietary benchmark index that measures the
investment returns of large capitalisation stocks listed on stock exchanges in sub-Saharan Africa
excluding the Johannesburg Stock Exchange.
The benchmark index is the “Sub-Saharan Africa Large Companies Index”. This is a customised
market-cap weighted index developed by Dr Ayo Salami and his research team.
Sub-Saharan Africa Large Companies Index – US$ Returns
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Investment Strategy
The Duet Victoire Africa Index is composed of all companies listed on stock exchanges in Sub-Saharan
African countries (ex South Africa) with a market capitalisation above $250 million that meet minimum
trading liquidity requirements.
The index will replicate the benchmark index by investing all, or substantially all, of its assets in the
stocks that make up the “Sub-Saharan Africa Large Companies” Index, holding each stock in
approximately the same proportion as its weighting in the index.
The index manager will ensure that the index rules are closely adhered to at all times, however, the
investment guidelines allow the index manager to temporarily remove stock from the portfolio if he
becomes aware of a company suffering from financial distress or illiquidity.
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Africa – The Indexing Approach
 Significant challenges are faced for investors seeking alpha. Active managers in Africa are
compelled to use a bottom-up approach to stock selection with liquidity and market size as two of
the key screening criteria. By the time a stock will meet the minimum liquidity constraints that most
active fund managers are using, the stock is not likely to be under-valued.
 Higher transaction costs in emerging markets combined with high turnover can represent a
significant performance hurdle for active managers in emerging markets.
 Index funds deliver a highly transparent investment processes, that consistently comply with fund
guidelines and regulations.
 Index funds provide investors with low cost access to the performance of different financial
markets.
 For the large relatively liquid stocks in Africa, a passive investment strategy will prove to be
effective. Even in Africa it is difficult to consistently beat the market. In the search for alpha, you
are more likely to find beta and sigma.
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Index Membership Rules
The primary factors that determine index membership are liquidity and market value.
To be eligible for inclusion in the index, each individual security must achieve a traded turnover of at
least 0.1% of its market capitalisation in the quarter preceding the index review date and in at least 2 of
the 4 quarters prior to the quarterly index review date.
At each quarterly review date all securities that satisfy the liquidity constraint and have a market value
above $250 million are selected. Inclusion and deletion of index constituents is managed according to
the following buffer rules: An index constituent is not deleted from the index until its market capitalisation has been below
$250 million for at least 2 consecutive quarters.
 A non constituent is not added to the index until its market capitalisation has been above $250
million for at least two consecutive quarters.
Constituent companies in the index are reviewed on the last day of March, June, September and
December and the rules governing index membership is implemented by a computer algorithm.
The index is capped and no single constituent has a weighting of more than 10%.
The aggregate weighting for all securities from a single country is capped at 40%.
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Historic Simulation
Benchmark Index – Price Returns
The historic performance of the Index was simulated back to 31 March 1999 to create a time series of daily
returns for the index, with quality revision of the securities in the index. The index has generated positive returns
in 27 out of the last 35 quarters.
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Historic Simulation
Summary Statistics – Sub-Saharan Africa Large Companies Index
2008 Return
(to Aug 08)
-24.9%
2007 Return
64.7%
14.1%
(over last 5 years monthly returns)
2006 Return
38.4%
2005 Return
10.2%
2004 Return
14.7%
2003 Return
43.2%
2002 Return
Annualised Standard Deviation
21.5%
Best Quarterly Return
23.3%
Worst Quarterly Return
-16.7%
Best Monthly Return
12.4%
Worst Monthly Return
-10.2%
Percentage of positive months
73.3%
In last 5 years
Index since inception
599.2%
(31 March 1999 to 31 Jan 2008)
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Let’s start running
“Every morning in Africa, a Gazelle wakes up. It knows it
must run faster than the fastest lion or it will be killed. Every
morning a Lion wakes up. It knows it must outrun the slowest
Gazelle or it will starve to death. It doesn't matter whether you
are a Lion or a Gazelle... when the sun comes up, you'd better
be running.”
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Sustaining growth in Africa
No magic bullet, however growth has to be private sector-led
Improving property protection rights
Enhancing the international networks of African companies
Closing the infrastructure gap – particularly transportation and housing
Creating vibrant financial markets – regional cooperation
Conclusion
‘If you see a bandwagon, you have missed it”
•
Contrary to perception Africa offers significant growth and profit opportunities
•
Africa is still under the radar of most investors and hence offers great opportunities to the early
adopters
•
Future equity returns from developed markets are projected to be significantly lower than historic
levels
•
Spreading equity culture and rising trading volumes
•
Returns outweigh currency depreciation
•
A credible and peaceful future of the world in the 21st century must include a positive future for
Africa
•
Development of efficient financial markets is integral to the alleviation of poverty
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