WARNING: This is Version 1 of my old archive, so Photos will NOT work and many links will NOT work. But you can find articles by searching on the Titles. There is a lot of information in this archive. Use the SEARCH BAR at the top right. Prior to December 2012; I was a pro-Christian type of Conservative. I was unaware of the mass of Jewish lies in history, especially the lies regarding WW2 and Hitler. So in here you will find pro-Jewish and pro-Israel material. I was definitely WRONG about the Boeremag and Janusz Walus. They were for real.
Original Post Date: 2010-10-21 Time: 19:00:02 Posted By: News Poster
Kampala – Larry Seruma is the Chief Investment Officer & Managing PrincipalNile Capital Management, LLC in New York. He spoke to the Wall Street Journal.
Ugandan-born Larry Seruma has more than 19 years of experience in portfolio management, equity and derivatives trading, investment research and quantitative investment strategies. In 2004 he founded Nile Capital Management, LLC. In recent years, he has served as a Managing Director at Proxima Alfa Investments (USA) LLC, a joint venture between Banco Bilbao Vizcaya Argentaria (BBVA) and Vega Asset Management. Previously he was a Principal at Barclays Global Investors (BGI), a division of Barclays Capital.
What companies do you have n your Nile Pan Africa Fund that you feel are particularly strong right now, and what makes them attractive?
Three main themes run through our fund. The first is the commodity theme, second is the consumer theme and the final is the infrastructure theme.
Within the commodity theme, our favorite stock pick is Tullow. It’s an independent oil and production company that is headquartered in London, but all its major assets and operations are in Africa. The company market capitalization is estimated at $18 billion. Currently the stock is trading at US$10.32 and our price target is US$14. The company’s major oil and gas development projects are in Ghana, the Jubilee fields and region, and in Uganda, the Albertine region. The oil and gas reserves from both locations are recent findings in the industry; it’s estimated that the company will start producing oil in Ghana in 2010 and Uganda in 2011. Tullow Oil is one the largest independent oil and gas exploration and production companies in Europe, but its current strategy is focused on Africa.
The company has a solid track record of discovery, development and bringing projects to production. We believe the current stock price does not fully reflect the potential value of its two major assets in Africa and the production revenues that it will generate. In addition, the company continues to explore oil and gas reserves in Africa and recently signed an agreement with China for US$2.5 billion for the development of the oil and gas assets in Uganda.
The second stock we like is South African Breweries. South African Breweries is a brewing company that originally started in Cape Town, South Africa. It has 90 percent market share for beer in South Africa; it is a very large company, with an estimated market capitalization of US$50 billion, and has been expanding its beverage business globally. It has assets in Latin America, Eastern Europe, in the U.S. they own Miller Brewers, and they have a small percentage of the beer market in China, but they are growing that and their Asian business. Africa and South Africa comprise about 35 percent of their total earnings.
We believe going forward, their Africa and Asia businesses are going to represent more and more on the company’s earnings. We like the company because it is well capitalised, has low debt, has fantastic management, and it is really looking to capitalize on emerging market growth. The price target for that stock is about US$37. It’s approximately $31 right now, so it’s a little over 20 percent in terms of our 12-month price target.
Now the infrastructure stock that is in our portfolio is MTN, with a market capitalisation of about US$34 billion. This is a telecom company currently trading at about US$19. Our price target is about US$26. This is the largest telecom company or telecom operator in Africa. It operates in 21 countries in Africa and has some exposure in the Middle East as well. But the story here is telecom is still a growth business in Africa, whereas if you look in Asia and look in the U.S., most telecom stocks trade on a value basis. But we like this stock because the level of penetration to telecom services in Africa is still extremely low, and as this goes up, the company is designed or geared to capitalize on that growth.
In addition to that, one of the biggest growth engines for this stock is the data. As everyone moves to 3G, 4G and higher data consumption on their cell phones, the stock is likely to capitalize on data growth in Africa. Data usage in Africa is only about 2 percent to 3 percent right now. It’s coming at a very low base, and the opportunity is enormous for the company.
Are U.S. investors comfortable investing in Africa, or are they still hesitant?
Seruma: U.S. investors have been slower to react on the growth opportunity in Africa compared to how much China, Brazil, Russia and India are investing in Africa. The U.S. appears to be a little behind. Recently, we’ve seen that changing. For example, recently IBM signed a US$1.5 billion deal with Bharti Airtel, which is a telecom operator in Africa. Recently we have seen Wal-Mart buy a South African retailer called MMRTY for US$4.2 billion in cash. They are using this as their platform and entry point into Africa.
Maybe Wal-Mart will lead Corporate America to Africa. On the individual investor side, our fund the Nile Pan Africa Fund is the only fund that exclusively focuses on the Africa geographical region.
We launched the fund about four months ago to offer access to U.S. investors to participate in opportunities in Africa markets. Historically, they have been very few investors participating in this region, primarily because there has been no investment vehicle that focuses on the region. We believe investor interest will grow. For U.S. investors, we believe investing in emerging and frontier markets will become mainstream, however we do recognize that home bias still dominates their investment allocation decision.
Original date published: 20 October 2010
Source: http://allafrica.com/stories/201010200855.html?viewall=1