Investor Sentiments Strengthens in Africa
The All-Share Index tracks the general market movement of all listed equities on the Exchange, including those listed on the Alternative Securities Market (ASeM), regardless of capitalization. 2015-12-31 to 2016-06-06, data source: www.nse.com.ng/market-data/indices & Bloomberg
Finally a solid uptick in the Nigerian stock market. The Nigerian Stock Exchange is a leading indicator for the stock market in Sub-Saharan Africa as it is the most liquid and sizeable market in Africa. Over the past few weeks it has been one of the few bright spots among global stock markets, staging a massive rally of over +20% when MSCI World is flat over the same time period. The Nigerian market has been bearish for over two years, correlating closely with the decline in oil prices. However, when oil rebounded sharply from the January lows, the correlation broke down completely. We have seen the market form a bottom and our trading models have been giving us bullish signals recently. The market now looks set for a rebound after years of investor’s pessimism, foreign selling and a market plunge of 50% from recent index highs. FMG Africa Fund has been increasing the exposure to Nigeria during the first quarter and with close to 50% exposure we are benefiting greatly from the rebound.
The FMG Africa Fund is a multi-manager fund investing its assets across Africa with a focus on the Sub-Saharan region; an area we believe has the most potential for long term growth. The majority of the Fund’s exposure will be long biased. By combining the alpha generating skills of seasoned managers specializing within the region, the portfolio will be diversified utilizing complementary investment strategies across geographical areas and sectors. Proprietary risk management models, top down fundamental analysis, timing models to determine allocations between the regions and a disciplined portfolio management process will ensure risk is managed soundly. Our due diligence process has taken us to the region extensively over the years, and we will continue focusing significant research efforts on this area of the world which we believe has such immense growth potential.