Guinness Nigeria - A Glass Half Full
- Nigeria is Guinness' Biggest Market and Diageo owns 54% of Guinness Nigeria. As such, success in Nigeria is of strategic importance to Diageo.
- The Guinness and Harp brands have seen their market share decline by 30% and 40%, respectively.
- The market has changed, with value brands challenging the more expensive incumbents. And brand equity of the flagship Guinness brand has suffered due to association with an older, dying demographic.
- Sell side analysts are bearish and the stock has declined by more than half in 2 years.
- A new management team has stopped the bleeding of volume sales and a turnaround might be in the works. I am not a buyer yet, but paying attention.
Boots On The Ground In Nigeria
- Investors in Nigerian stocks face uncertainty with regards to the exchange rate, upcoming elections, terrorism, and oil prices.
- It is during periods of great uncertainty that seeds are planted for subsequent attractive returns.
- A recent trip to Nigeria confirmed that investment opportunities exist for long-term investors who are able to stomach market volatility and uncertainty in the interim.
Investing In Africa With ETFs
- ETFs have penetrated niche asset classes, such as frontier markets equity. This includes Africa, with EZA, AFK, and NGE.
- In illiquid, under-researched markets, ETFs don't offer the same diversification and market return matching as in the US.
- Particularly in Africa, ETFs may not be adequate as a replacement for individual securities but can serve to gain additional diversification. Case in point: the Nigeria focused ETF NGE.
Nigeria's Perfect Storm?
- Nigerian investors are facing a perfect storm of Ebola, terrorism, and falling oil prices.
- These are serious issues, but the market pendulum might be over swinging on the pessimism side.
- Low valuations for attractive growth opportunities are pricing in the risk and the macro picture is more likely to improve than deteriorate.
- Weak African Rand Spells Opportunity
- Banking On Kenyan Banks - Conservative Ratios And Stellar Growth
- Safaricom - A Frontier Market Company Set To Dial Up Profits
- Do Africa Funds Provide Access To African Growth?
- South Africa: A Glass Half Empty Or Half Full?
- The Case For Investing In South Africa (Part II)
- The Case For Investing In South Africa
- Investing In Green Stocks - A Promising Future, A Disappointing Past