Imara manages a suite of African equity investment funds and maintains an extensive Africa-based equity research capability. Every year, the group takes a fourth-quarter roadshow to major international centres and recently returned from the trek to the USA, where Imara executives encountered positive interest among professional investors.
Imara group CEO Mark Tunmer noted: “On average, equity values have doubled in emerging markets - except for Africa - since markets began to revive in March. It's starting to look like full value has been achieved elsewhere, which may explain the response.
“US investors had very few questions about North Africa or South Africa. Their interest was on all the markets in between, with Zimbabwe and Nigeria coming in for closest scrutiny.
”African markets have not shared in the general upward trend seen in other emerging markets. Yet the news out of Africa is generally good. Corporate earnings are strong. Recessionary pressures have not had nearly the same impact as elsewhere. Yet equity values have remained low - suggesting decent value opportunities for international investors.”
Imara presented its African investment data, interpretations and projections to audiences in New York, Boston, Providence (Rhode Island), Washington, Philadelphia and Chicago.
For the third year running, the team was invited to New York's Columbia University to address MBA students on African opportunities and challenges.
Tunmer added: “Zimbabwe is interesting to Americans because the economy was assumed to have been ruined beyond repair by the country's lost decade. Yet dollarisation and the first stirrings of reform immediately triggered a big upsurge in economic activity - indicating that huge potential can be unlocked, even by quite limited initiatives.
“In Nigeria, the focus is on banking. They have had their banking crisis, forced banks to write-off non-performing loans and insisted that all banks now adopt the same financial year. Banking sector values have been in freefall, but a bottom seems to have been reached.
“Simultaneously, oil prices are back up again, with positive spin-off for numerous sectors in Nigeria - yet equity prices have been slow to revive. Again, the value opportunity is substantial.”
Those making inquiries tend to be strategic players rather than fund managers known for tactical forays.
“Representatives of university endowment funds and foundations tend to take a long view,” said Tunmer, “and these were among the most interested in the African opportunity. This is very encouraging.”
