Monthly Highlights: February 2008

•  Performance led by gains in Nigeria & Kenya
•  Strong performance from the consumer & telecom sectors
•  Kenyan settlement paves way for continued economic growth in ancillary East African nations such as Uganda
 


Performance led by gains in Nigeria & Kenya

The Nigerian All Share Index rose to its all-time high as the nation’s strong resource position was buoyed by a dramatic +12.2% jump in crude. Looking east, Kenya certainly justified our interest as diminished political risk drove the NSE20 up +7.6% following the power-sharing agreement between President Kibaki and the ODM.

Strong performance from the consumer & telecom sectors

Solid performance from the consumer and telecom sectors as key investment themes (i.e. urbanization, information revolution, et al) continue to play out as expected. Building materials and property-related sectors were mixed although our bullish long-term outlook remains in place given positive underlying fundamentals across commercial and residential construction.

Kenyan settlement paves way for continued economic growth in ancillary East African nations such as Uganda

Developments in Kenya will likely provide ample opportunity for event-driven investors over the coming months. Yet while Kenya’s power-sharing arrangement planted the seeds for economic recovery, we feel that ancillary benefits to the broader East African region provide additional scope for return. Most notably, we envisage an upturn in Uganda as the nation relies heavily on Kenyan ports for import/export of commodities and various other goods. With commodity prices trading at or around all-time highs, resource-rich nations in West and Northern Africa will also remain on our radar screen. Once again, we prefer to play the bullish resource theme via knock-on effects to household income and domestic consumption. In Southern Africa, regional electricity shortages continue to plague the underlying markets and partially explain the weaker tone. We will continue to monitor developments across South African markets as compelling valuations are beginning to present themselves.

 

 

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