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| Share Name | Share Symbol | Market | Stock Type |
|---|---|---|---|
| Africa Opportunity Fund Limited | AOF | London | Ordinary Share |
| Price Change | Price Change % | Share Price | Last Trade
|
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|---|---|---|---|---|
| 0.00 | 0.00% | 0.65 | 00:00:00 |
| Open Price | Low Price | High Price | Close Price | Previous Close |
|---|---|---|---|---|
| 0.65 | 0.65 | 0.65 | 0.65 | 0.65 |
| Top Posts |
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Posted at 24/10/2012 11:07 by loganair From a couple of months back - Still an interesting read - Chris Mayer August 2012:A year ago, I wrote to you about my favorite play on Africa - the Africa Opportunity Fund. (I also covered it in my book World Right Side Up.) It trades in London, ticker AOF. At the time, AOF traded for 83 pence. It is today about 78 pence. For all of 2011, a share in AOF fell 10.4% in price. The net asset value of the fund actually rose, however. At the end of May, AOF's NAV was nearly 90 pence. That effort looks heroic when you consider what happened in African markets last year. South Africa (-15%), Nigeria (-19%), Kenya (-30%) and Egypt (-52%) were all down. It also compares favorably with what the large emerging markets did. Brazil (-27%), Russia (-20%), India (-37%) and China (-26%) all cost investors dearly. Last year, AOF proved its mettle. It is the safest way to invest in African stocks that I know of. Robert Knapp and Francis Daniels are the headmasters of AOF. I caught up with Francis to get an update on the fund. He had recently completed his annual report. It is worth reading (visit www.africaopportunit The fund's biggest winner was Shoprite, a grocery store chain, which rose 79%. I am, however, drawn to the discussion on one the fund's losers. Losers are always more instructive. In this case, it was Great Basin Gold. The stock fell 67%, but the fund held bonds that lost 37%. The reason for the disappointment is one all gold investors will appreciate. In 2011, Great Basin said it was going to produce 110,000 ounces of gold from its Burnstone mine. By March, that goal fell to 96,000 ounces. By June, it was down to 58,000. In July, Great Basin amended the forecast yet again to 30,000 ounces. Its actual production for the year came out to 21,989 ounces! Ah, you gotta love mining! But the lesson Francis pulls out is a gem. He quotes from Sir Theodor Gregory's biography of Sir Ernest Oppenheimer, the great mining magnate who founded Anglo American in South Africa: Ernest Oppenheimer throughout his business life insisted on the necessity of liquidity, in the sense of always having available a large margin of uncommitted resources; this implied, among other things, a cautious dividend policy and large reserve funds... The supreme need of a mining house, he held, was to maintain, at all times, an adequate margin of liquidity, not only so as to be able to take advantage of new opportunities, if and when they arose, but to prevent dependence on the vagaries of the money market. A great bit of wisdom from an old mining crow - pin that up on your wall and don't forget it. "Great Basin Gold experienced a misfortune that forced it to breach Sir Ernest's financing policy," Francis writes, "a failing all too common among the mining and oil and gas exploration and development industries." So true... But let us move on to the present-day opportunities. I was most fascinated by AOF's forays into agriculture, which make up 18% of the fund. Francis highlighted Okomu Oil, which makes crude palm oil and rubber. Palm oil is an ingredient in all kinds of soaps, cosmetics, edible oils and even biodiesel. AOF was able to pick up Okomu for less than replacement cost. The cost of starting a brand-new plantation comes to about $5,000 a hectare. Okomu was trading for about $3,600 a hectare. It also had a price-earnings ratio of less than 5 and pays an 18% yield. These are the kinds of exposures that are nearly impossible for you get on your own but that you get in spades by owning AOF. I asked Francis what the biggest difference is today versus a year ago. "The biggest difference I think is that the real cost of money in our markets has risen a lot, therefore harming stock market performance," Francis told me. "For example, the yield on 3-year treasury bills in Ghana, denominated in cedis, is 23% today. Inflation is 9%, so the real yield is 14%. It is tough for a stock market to compete with such money market returns. A year ago... Ghanaian government cedi-denominated treasury bill rates were in the 12% range for 182-day paper." Across many markets in Africa there is a similar story. This creates competition for stocks. After all, why invest in a stock if you can get 23% on a 3-year t-bill? But these things ebb and flow, and AOF is in great position when the markets rise again, as they inevitably will. Another big difference is in commodity pricing. Oil, coal, rubber and many others are all down. As natural resources are still an important part of the story for Africa, these declines have dampened stocks as well. Even so, big investments in mining projects still move ahead. I asked Francis if there was a Mongolia of Africa, a country with a small population on the cusp of enjoying a huge windfall from natural resources. "The Mongolia of Africa, to me, is Mozambique," Francis offered. "We have very modest exposure to Mozambique, but I would like to increase it a lot." Over the long term, Africa is rich in possibilities and deserving of a slot in your portfolio. AOF is a great way to get exposure to Africa. Francis is a friend of mine and worthy of your trust. As his annual report makes clear, he is a thoughtful money manager who follows a proven process. He has a great track record and has his own skin in the fund. The results should be good for patient investors. |
Posted at 23/10/2012 19:15 by tenapen Hi John,I was trying to find this thread again after reading this article on investing in African Funds / ETF . A full list of opportunities and ZAM also get a mention ;) ------------------ loganair 3 Aug'12 - 18:01 - 31 of 48 I've been looking to invest in an African Fund for a couple of years now, seems to be where the corporate money is going at the moment. --------------- October 22 2012 at 11:32am By Laura du Preez Individual South African investors who want exposure to the good returns that are expected from African equity and other markets still have relatively little choice of investments. Cont... |
Posted at 05/8/2012 10:29 by loganair tenapen - Finn seem to have a high initial charge (only for retail investors and not Institutional investors with the annual charge being twice the percentage for the retail investor compared to the Institutional investor), not easy to find which countries they are invested in and at what percentage which are easy and simple to find when it comes to AOF. In other words AOF seem to be far more open and up-front in their investments and information readily available than Finn.This has already set alarm bells ringing. jonwig - the fall in the AFMF's share price however doesn't mirror the AOF share price and doesn't really answer why the AFMF share price is still around the price it was in 2009 while in the same period AOF share price has risen some 60%. |
Posted at 03/8/2012 17:01 by loganair I've been looking to invest in an African Fund for a couple of years now, seems to be where the corporate money is going at the moment.No doubt once the big boys have made their money in Africa, say around 2020, Retail Investors will be allowed a few crumbs of the cake. I was wondering if any one had any ideas about this fund as it seems to be investing in the right countries. Zambia, Ivory Coast, Nigeria, South Africa, Senegal, Ghana, Zimbabwe, Namibia Botswana, Republic of Congo, Mauritius, Mozambique, Democratic Republic of Congo & Africa General. Also Angola, Sierra Leone, Botswana and Ivory Coast Government Bonds All the other African Funds I've come across have South Africa at 50% or more of their said funds. |
Posted at 09/2/2009 19:03 by jonwig Hi, thanks.I haven't received the letter yet, but read the RNS this morning, which doesn't have so much detail. I rang Jamie Legg at NSTAM and he suggested I e-mail him with my concerns: Jamie Legg, Hello, Many thanks for suggesting I might e-mail you following our brief telephone conversation this lunchtime. I would be grateful if you would pass this on to the person directly responsible. I would hope that solutions might be considered other than a winding up and distribution of the fund's assets. This is because some holders knew full well that investment here would be a long-term commitment and will retain that view (as I do) even in the current financial situation. Also, an attempt to realise assets would most probably produce considerably less than the current 26p or so per unit. There are a number of possible ways forward, as I see it: (1) Create a new closed-end fund - an Investment Trust - so that units could be exchanged for shares in the fund. (2) Offer exchange of units for units in an existing NSAM fund or shares in an existing investment trust ( Henderson , if the acquisition proceeds), which would assume ownership of the underlying securities. (3) Look into the possibility of other closed-end companies which might buy the assets in full, exchanging new shares for the units. There are two which I follow: Africa Opportunity Fund and PME Africa Infrastructure Opportunities Fund. Holders who opted for exchange into a closed-end fund would be aware that a NAV discount of up to 50% could be anticipated, but may also feel that the current lack of liquidity was a temporary phenomenon. The worst outcome, I believe, would be one in which realisation of assets produced an artificially reduced price. I am quite puzzled that demand for redemptions should be heavy here, as most holders should be relatively sophisticated investors. Forced selling, perhaps? I should be very grateful if you could give consideration to a wide range of alternatives here, and hope than my e-mail has been helpful. Regards, ... It seems they've already decided on what they will do, though. The mistake was to use an open-ended fund for this kind of venture. AOF had a much easier solution! |
Posted at 08/1/2009 08:26 by jonwig This is NS HoA fund's suspension of redemptions statement.The 28 day maximum ends today ... I don't know whether they're relisted or not. 11.12.2008 Whilst prospects for companies in the sub-Saharan region remain strong, the impact of the credit crunch and the knock-on effect on global stock markets has resulted in an increase in redemptions from investors. This has coincided with a number of events that have caused liquidity in the sub-Saharan markets to weaken in recent days. New Star, with agreement from the fund's depositary, Royal Bank of Scotland, has, therefore, reluctantly decided to temporarily suspend dealing in the New Star Heart of Africa Fund - valued at £29 million* - until further notice. Events in Nigeria and Ghana have had a particular impact on the fund's liquidity position. In Nigeria, where the fund is approximately 30% invested, the repatriation of monies received from selling securities has been delayed by restricted foreign exchange flows. At 11 December 2008 the fund had some $6.2m of proceeds from disposals awaiting repatriation from Nigeria. Similarly, in Ghana, where the fund is approximately 21% invested, the market has been less liquid than normal. Trading volumes have been lighter as a result of the uncertainty ahead of the general election. The close election result registered on 11 December 2008 means there will need to be an electoral run-off, which could potentially delay the resumption of normal trading. Whilst we regret having to take this action, the temporary suspension of dealing is designed to restore sufficient liquidity to the fund for it to meet redemptions once it re-opens for dealing. New Star intends to minimise the period of suspension; in accordance with FSA rules this should last for no more than a maximum of 28 days. We are, however, mindful that fair value for all investors needs to be achieved when selling securities in a weak market environment, given the illiquid nature of some of the markets in the sub-Saharan region. Jamie Allsopp, manager of the New Star Heart of Africa Fund, says: "It is with great reluctance that New Star has temporarily suspended dealing in the New Star Heart of Africa Fund. Since launch last November, the fund has performed relatively well amidst the turmoil of the past year falling 24.40%¹. This compares favourably with the 38.78%² fall in the MSCI Emerging Markets Total Return Index. The FTSE All-Share Total Return Index has fallen 29.8%¹ over the same period. I still believe, despite this temporary suspension, the fundamental prospects for the region remain attractive over the medium to long term." |
Posted at 11/12/2008 11:22 by jonwig Liquidity in Africa trips New Star fund - experts remain positiveBy Rob Mackinlay New Star's Heart of Africa Fund has suspended trading citing redemptions and liquidity problems in sub-Saharan markets. In an announcement this morning New Star said: "Due to a number of events that have caused liquidity in the sub-Saharan markets to weaken in recent days, along with an increase in redemptions from investors, New Star, with the agreement of the fund's depositary, Royal Bank of Scotland, has decided temporarily to suspend dealing in the New Star Heart of Africa Fund until further notice." In its most recent factsheet on Trustnet the fund size was given as £55m on 31 Oct. In today's statement the fund size was given as £29m. The note says that the fund has performed relatively well since launch, falling by 24.4%, compared to a 38.8% fall in the MSCI Emerging Markets Total Return Index. Manager Jamie Allsopp recently told Investegate that the fund did not have many hedge fund clients. Hedge fund redemptions have been a problem for Lonrho, an AIM-quoted pan-African conglomerate. Lonrho - hedge fund redemptions, not fundamentals are driving falls Analysts remain relatively positive about Africa Michael Power, investment strategist for Investec, said he expected Africa to "cool" but thinks that this will be seen as an opportunity by some investors, particularly China: "Actually they may use this downturn to accelerate their linkages with Africa. Africa will cool but China will remain a close friend. As others back-off, China will back-fill! This will build goodwill for the future. E.g. China has just announced it will build/fund a $1.9bn railway in Libya." In a note to clients in November, analysts at South Africa-based Frontier Advisory said: "Investment and financing in specifically Africa, through SWFs but more so through state-owned bank lending (such as China EXIM Bank) is presently not expected to dry up amidst the current turmoil in the markets. Yet, globally, Chinese SWFs generally are looking to be more cautious in terms of their overseas investment strategy. The note said: "While the "war-chests" of the cash-rich countries, including China and the gulf states, have supported the Western cash-strapped nations, buying up cheap assets and stakes in large firms (specifically the banking and financial sectors),these "saviour" funds could become more picky and choosy given potential losses of the investments currently at hand." David Lenigas, executive chairman of Lonrho, on Tuesday told investors that 2009 would be worse than many expected and was not looking to grow, only maintain the company's operations in Africa. However he remained bullish. Lenigas is also positive about the continued interest of China in Africa, despite reports about China's growing problems: "I personally don't see China's internal problems directly affecting their African ventures at all in the short to medium term. "A large proportion of the Chinese infrastructure interests are contractual with certain African Governments and these programmes should continue as normal. However, if there is a long term slow down in the Chinese economy, then situation may in fact change. "Africa is somewhat derisked from the world credit crunch right now, and Africa can provide new opportunities for China Inc." While UK advisers have voiced concerns about New Star funds, one of the notable exceptions has been the Heart of Africa fund with recent words of support from Hargreaves Lansdown analysts. |
Posted at 11/12/2008 11:13 by jonwig New Star Asset Management Group PLC ("New Star") gives notice of the temporarysuspension of dealings in its £29 million* New Star Heart of Africa Fund. Due to a number of events that have caused liquidity in the sub-Saharan markets to weaken in recent days, along with an increase in redemptions from investors, New Star, with the agreement of the fund's depositary, Royal Bank of Scotland, has decided temporarily to suspend dealing in the New Star Heart of Africa Fund until further notice. The temporary suspension of dealing is designed to restore sufficient liquidity to the fund for it to meet redemptions once it re-opens for dealing. Since launch last November, the fund has performed relatively well amidst the turmoil of the past year falling 24.4%1. This compares favourably with the 38.8%2 fall in the MSCI Emerging Markets Total Return Index. The FTSE All-Share Total Return Index has fallen 29.8%2 over the same period. |
Posted at 28/6/2008 11:46 by jonwig Cantos interview, 26/06/08, transcript:Africa investment - why it's no fad Hello and welcome to the market brief. There's been a growing interest in the potential for investing in Africa for some time but it's been mainly focused on the equity and resource area. Today, we're going to be taking a look at the opportunities within the debt market and we're joined by Kevin Colglazier, the Chief Investment Officer of Standard Asset Management. Q. Kevin, first of all, if I could talk to you about the potential you see for the region. Just how big do you think it is? A. I think it's a very strong case. It's not a fad. I think it's here to stay. I think the market is waking up to the changes that have occurred in Africa over the last 10 or 20 years, underneath the headlines of Zimbabwe or the Kenya elections, and things like that, but to some broad-based political stability, some slow and steady economic growth and a tailwind being provided by the commodities market. And equally, I think most investors are keen to invest in emerging markets in an early stage if they get the opportunity. There aren't that many frontier markets left in the world. The world is pretty well covered by emerging market investors. And Africa probably represents one of the last frontier markets where investors can effectively get in on the ground floor. Q. Now you alluded to some of this already, but critics always point to the international and political instability in the region. How would you address those concerns? A. Well I think there are two issues. One is, you can't have your cake and eat it, too. You can't want to invest in a frontier market and then expect it to have economic or political stability like Western Europe. So the political risk is always going to be higher. And the second is, I think that Africa gets somewhat of a distorted image, in the sense that, again, the Zimbabwe elections, the Kenya elections, really consume the headlines. What doesn't get mentioned a lot are peaceful, normal government elections in various countries, better economic progress (African GDP is very strong), nice growth numbers. Those sorts of things don't really make the headlines. It's more the negative news, which I think is, to some degree, exaggerated and somewhat skewing some investors' opinions. Q. Now there have been a few African equity funds launched recently, but what are the distinct advantages of investing in the debt market there? A. The debt market gives you access to companies that may or may not have equity listings. So it gives you opportunities to get into investment opportunities that may not exist in the equity market or the private equity market. And the from the company's point of view, not all companies have or want equity listings. Not all companies have or want private equity investment. Particularly in more developed markets, debt is a completely logical part of a company's capital structure. And I think that it goes both ways. It gives the investors opportunities to get into investment opportunities they may not have on the equity side. And from a company's point of view, it gives them another avenue of raising capital. Q. And as you look across the region, are there any companies that seem particularly attractive? A. Well the fund we're talking about is very bottom-up driven. Having said that, though, I think that, clearly, there are three zones that are very attractive. Obviously, there are a lot of positive things going on in West Africa, particularly Nigeria and Ghana. East Africa, as well - Kenya, Tanzania, Uganda. And then the area around South Africa. The fund will not invest in South Africa yet but in sub-Saharan Africa, ex-South Africa. There is a lot going on in the area bordering South Africa. Surely there must be some interesting things to be done in Angola, because obviously the commodities boom. I think Mozambique, for different reasons is kind of interesting as well. And I think there are a lot of interesting things that are being done right now in the CFA zone, the French-speaking part of West Africa. Q. That's quite a broad spread. A. Yes. Q. So what sorts of returns can investors expect to receive from the African debt market? A. We would hope that in this fund, that the equity investors would achieve something around 15 per cent per annum after fees. Q. Now you said that the Standard Africa Development Fund is amongst the first dedicated sub-Saharan fixed-income vehicles. So just how receptive are companies in the region at tapping this different kind of funding? A. It goes back to what we were saying earlier, in terms of debt is a completely viable way for a company to raise money. We see that in the US and Western European markets and the Japanese market all the time. And again, not all companies have access to or the desire to have listed equities. Not all companies have access to or the desire to engage in private equity-type transactions. And in some cases where it's a relatively defined type of capital expenditure, then borrowing money makes perfect sense. Q. So just to sum up a few of the things that we were talking about, just how much potential is there for growth in the region in the coming years? A. Again, as we were saying earlier, some of the negative news is, to some degree, hiding some of the very positive economic news that's going forward. African GDP over the last five years has been very strong. It's been well in excess of what we see in the developed markets and one of the leaders in emerging markets. There is obviously a commodities tailwind that's occurring in many countries in Africa, both obviously on the energy front, but also in metals. There is obviously agricultural expansion going on - the global demand for food, Africa is a very fertile place. I'm trying not to put a number on it because it's a continent, it's not one country. And obviously the different countries are very disparate. But I think we should continue to see decent, strong GDP growth out of the region, as a whole. Q. Thank you very much. A. All right. Thank you for your time. |
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