Aly-Khan Satchu

2008 Country Returns

Thanks.

Visually this is the equivalent of being smacked in the face. There is a new world out there a la Columbus when he found America. The rewards for the Intrepid Investor are in the Frontier markets.

Aly-Khan Satchu
rich.co.ke

Investing in Non-U.S. Stock Markets

Dear Richard,

Thanks for the compliment. It made my morning.

I came home three years ago, having been in London for many years. What has really struck me in Kenya is the scale of the domestic shareholder base. It is widely expected to be 2m at the end of our current and biggest IPO Safaricom. This is an extraordinary outcome and actually a phenomenon. Today, Nigeria has 6 banks in the top 100 in the world. I really expect the African landscape to be something completely different in a very short space of time. Extraordinary things are happening and its all being compressed into a very few years.

Ex South Africa, I feel SSA is the last frontier. It was a previously very fragmented Continent with small pocket sized markets. The Mobile phone was the catalyst that triggered the aggregation of these small units into scale.

Lot of folk talk of Commodities etc but the next sharp trigger is coming from the Continent being plugged in to the global superhighway.

There might very well be a great arbitrage in identifying those markets that are set to get into these various new indices.



Take care
Aly-Khan Satchu
rich.co.ke

Investing in Non-U.S. Stock Markets

Dear Richard,

What is your definition of tradeable stock markets in relation to Africa and particularly in SSA?

There is a whole lot going on which appears not to be captured by your map?

Aly-Khan Satchu
rich.co.ke

MSCI Frontier Markets Index Leaves Emerging Markets In the Dust

Its a perfect storm for Frontier markets and especially SSA Equities. As an asset class, Folk tend see the markets through a Bob Geldof Live Aid prism and this lack of perception means there is enormous value. The African continent is growing at its fastest rate since most Countries got their Independence. In Kenya, the State replayed Thatcherism. They started selling shares in what were previously mismanaged and bloated Government Parastatals, for example. These companies became profitable and Investors have reaped a very handsome reward. The State has a win win, instead of writing subsidy cheques, The Exchequer is receiving dividend cheques. The swing effect is material. Investors have found a taste for the Stock Market. Domestic demand did not exist before. In Kenya, we are launching our biggest IPO [Safaricom Mobile phone company] in our history. A million new shareholders are likely to enter the market. These are not small things. These markets are in a sweet spot.

Aly-Khan Satchu
rich.co.ke