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  • The population of the African Continent has reached almost a billion people, almost double the population of the EU (with 460m people) and GDP is growing at close to 6% in real GDP terms (the EU growth is sluggish at 1.1% in 05) the African GDP has been growing faster than the global average in 4 of the last 5 years Cases in point include Nigeria (which grew 5.9%) and Egypt (which grew 4.9%) in 2005 Economic growth driven by: Resources boom – a new 20 year bull market in a resource hungry world driven by Chinese and Indian urbanisation?? G7 debt write-offs More stable politics Move towards capitalism and away from socialism (Ghana, Tanzania) Economic policy reform Economic Growth Macro-economic policies Democratic change of governments Favourable demographics Improving services
  • The population of the African Continent has reached almost a billion people, almost double the population of the EU (with 460m people) and GDP is growing at close to 6% in real GDP terms (the EU growth is sluggish at 1.1% in 05) the African GDP has been growing faster than the global average in 4 of the last 5 years Cases in point include Nigeria (which grew 5.9%) and Egypt (which grew 4.9%) in 2005 Economic growth driven by: Resources boom – a new 20 year bull market in a resource hungry world driven by Chinese and Indian urbanisation?? G7 debt write-offs More stable politics Move towards capitalism and away from socialism (Ghana, Tanzania) Economic policy reform Economic Growth Macro-economic policies Democratic change of governments Favourable demographics Improving services
  • With the exception of SA, markets are dominated by locals and individuals Broker research is generally weak, with some exceptions. Electronic information is hard to come by and often out of date. AFS very often only available in hard copy, and maybe companies often don't have websites Shares and especially corporate action are often mispriced. For example share price leaps on announcement of "bonus shares" or rights issue at a low price and share price does not drop when the shares in issue increase. This leads to great buying and selling opportunities The discovery phase often brings the greatest capital returns as the dawning of the new reality draws in new investors Insider knowledge is sometimes apparent in price action, but this does not remove the investment opportunities created by diligent research, company visits and proper valuation.
  • With the exception of SA, markets are dominated by locals and individuals Broker research is generally weak, with some exceptions. Electronic information is hard to come by and often out of date. AFS very often only available in hard copy, and maybe companies often don't have websites Shares and especially corporate action are often mispriced. For example share price leaps on announcement of "bonus shares" or rights issue at a low price and share price does not drop when the shares in issue increase. This leads to great buying and selling opportunities The discovery phase often brings the greatest capital returns as the dawning of the new reality draws in new investors Insider knowledge is sometimes apparent in price action, but this does not remove the investment opportunities created by diligent research, company visits and proper valuation.
  • With the exception of SA, markets are dominated by locals and individuals Broker research is generally weak, with some exceptions. Electronic information is hard to come by and often out of date. AFS very often only available in hard copy, and maybe companies often don't have websites Shares and especially corporate action are often mispriced. For example share price leaps on announcement of "bonus shares" or rights issue at a low price and share price does not drop when the shares in issue increase. This leads to great buying and selling opportunities The discovery phase often brings the greatest capital returns as the dawning of the new reality draws in new investors Insider knowledge is sometimes apparent in price action, but this does not remove the investment opportunities created by diligent research, company visits and proper valuation.

Kevin Colglazier, Chief Investment Officer, Standard Asset ... Kevin Colglazier, Chief Investment Officer, Standard Asset ... Presentation Transcript

  • Investing in Africa US Africa Business Conference June 2008
    • Standard Bank Group
    • The Standard Bank Africa Investment Team
    • Why Invest in Africa?
    • Standard Africa Development Fund
    • Overseas Private Investment Corporation
    • Contacts
    • Disclaimer
    Contents
  • Standard Bank A leader in Africa and the broader Emerging Markets
    • Standard Bank is the largest financial services group in Africa
    • Headquartered in Johannesburg
    • Total assets in excess of US$120 billion
    • Employs 40,200 people worldwide
    • Represented in 38 countries, focused on emerging markets and resource banking
    • Standard Bank recently won eight awards in November 2007 from the Banker magazine including, the ‘Emerging Markets Bank of the Year’ as well as “Bank of the Year” for seven different African countries
    • Asset Management Unit has over $1billion invested in Africa (ex. SA)
    Standard Asset Management Strong and growing presence across the continent
  • Standard: We are Africa’s Asset Manager
    • Founded in 1969, STANLIB is one of the longest established African asset managers
    • Presence in key under-researched growth markets
    • Outside of South Africa, indigenously staffed asset management companies in Botswana, Kenya, Namibia, Swaziland, Lesotho, and Uganda
    • Nigeria to follow with the acquisition of IBTC Bank by Standard Bank.
    • North and West Africa covered by specialists in South Africa
    • Ability to leverage off Standard Bank group presence
    Strong and growing presence across the continent Standard Asset Management Standard Bank has a presence in key under-researched growth markets Standard Bank and STANLIB trade under Stanbic name in some African Markets to avoid confusion with Standard Chartered Asset Management from Standard Bank
  • Primary investment team biographies Kevin Colglazier: Chief Investment Officer (based in London) Before joining SAM, Mr. Colglazier was the Head of Global Fixed Interest in London and the Head of Asian Fixed Income in Singapore for First State Investments.  Prior to this, Mr. Colglazier was the Investment Director of Fixed Income for Global Asset Management (GAM) in Singapore and London. Before GAM, he was the CIO at Chase Manhattan Private Bank in Geneva and Hong Kong. Earlier to this, Mr. Colglazier was a fund manager with Guinness Flight and started his career with Putnam Investments. Mr. Colglazier has a BA in History and Government from Georgetown University and a MPhil. in International Relations from Cambridge University. Alia Yousuf: Head of EM Debt (based in London) Ms. Yousuf previously managed the emerging market bond portfolios at First State before joining SAM. Prior to this, she worked as an emerging market debt portfolio manager at Fischer Francis Trees and Watts. Her previous work experience includes economic analysis for both Emerging Markets Economics Ltd and the World Bank. Ms. Yousuf holds a BSc in Econometrics and a MSc in Economics from the London School of Economics John Mackie: Head of Africa Funds (based in Johannesburg) Mr. Mackie has overall investment responsibility for all the STANLIB Asset Management portfolios in Africa outside South Africa. Mr. Mackie joined Standard Corporate and Merchant Bank Asset Management in 1996 as a Portfolio Manager. He also spent eleven years at Standard Merchant Bank’s Treasury Division, seven of which were in Corporate Foreign Exchange sales. Prior to this he worked as a Money Market dealer . He holds a Bachelor of Commerce (honours) from the University of Cape Town.
  • The Standard Africa Development Fund Head of EM Debt Alia Yousuf Standard Africa Development Fund Emerging Market Debt Botswana Namibia Stephane Bwakira, PM Bangidza Dhliwayo, PM Eino Emvula, Analyst Thabo Ncalo, Analyst Modise Mokone, Analyst Alejandro Arevalo, Analyst Chris Perryman, Dealer Mark Bodon Senior Credit Analyst EM Kenya Gathungu Gichuha, PM Abdi Hassan,PM Kenneth Kaniu, Analyst CIO Kevin Colglazier Head of Africa Funds John Mackie David Makoni Analyst TBA TBA African Debt Unit Pan Africa (ex SA) A dedicated unit with the backing of a well resourced team A Dedicated Unit
  • “ [Sub-Saharan Africa] is not all hype. High commodities prices, good debt-management, … debt relief and better economic leadership have produced the strongest growth and lowest inflation in sub-Saharan Africa in over 30 years.” Economist, December 2007 Why Invest in Africa? "If Russia was a once-in-a-lifetime opportunity, sub-Saharan Africa is a second once-in-a-lifetime opportunity “ Stephen Jennings, Renaissance Capital, May 2007 “ The continent is experiencing its highest growth since the 1970s” The Africa Competitiveness Report, World Economic Forum, June 2007 “ Africa is the only continent yet to be built. It will be here that some of the great politics of our century will play themselves out. It’s a continent of 900 million potential producers and consumers. Many of the great rivers and resources on the planet are here. It is a continent growing economically at more that 5% pa with 23 democratic-ish countries south of the Sahara” Bob Geldof, February 2008
    • 85% of Africa’s population now lives under stable or relatively stable regimes, which pursue free market economics
    Africa’s improving environment Source: STANLIB
  • “ Africa’s annual GDP growth has averaged about 5% annually over the past six years. This growth has been more broad-based, with non-oil exporters growing as fast as the oil exporters.” Source: OECD Africa Economic Outlook Report (2007) Economic Growth Forecast to Average 6%+ in 2008 Source: RMB Africa Research, OECD Africa’s improving environment
  • All Africa external debt and debt service Source: IMF World Economic Outlook April 2007 Debt service ability has increased substantially
  • African foreign direct investment FDI Flows into Africa are Now Growing Faster than into any other Emerging Market Region Source: Deutsche Bank Research
  • Untapped mineral reserves Direct Investors Like China Already See the Opportunities Source: The Africa Report Platinum 87.7% Manganese 85.8% Chromium 73.0% Diamonds 63.1% Cobalt 48.6% Gold 41.3% Bauxite 31.5% Copper 26.4% Uranium 16.5% Nickel 8.0% Oil 8.0% Natural Gas 7.6% Zinc 7.2% Coal 6.4% Iron Ore 4.5% Greatest Mineral Reserves on the Planet
  • Why Invest In Africa? 10 SSA Countries Already Produce Oil With Others Actively Exploring…
    • Nigeria and Angola are major oil producing countries in sub-Saharan Africa
    • Oil production is expected to increase as the political and investment climate improves
    • Nigeria and Angola now account for almost 20% of the world’s oil production
    Source: Economist Intelligence Unit
    • U.S. oil imports from the Middle East have been declining since 2002
    • Whereas oil imports from Africa have increased and now account for a greater share of US oil imports than the Middle East
    • Africa forecast to provide 25% of US oil supplies by 2010
    Oil imports US now imports more oil from Sub-Saharan Africa than the Middle East
  • Standard Africa Development Fund (Deal Pipeline)
    • Expand port facility (Gabon)
    • Agro-business development (Nigeria)
    • Infrastructure project financing (Senegal)
    • Infrastructure project (Sierra Leone)
    • Small mining project (Botswana)
    • Housing development (Ghana)
    Private financing sector focus Forthcoming deals
    • Agricultural sector: Ghana, Francophone Africa, Kenya
    • Housing sector: Ghana, Uganda, Francophone Africa
    • Power sector: Tanzania, Kenya
    • Infrastructure sector: All across Africa, currently looking into Kenya, Uganda, Ivory Coast, Nigeria
    • Waste management: Cameroon, Uganda
    • Our local offices: London, South Africa, Botswana, Swaziland, Lesotho, Kenya, and Uganda
    • Capital markets: For example Standard Bank, Citibank, Barclays/ABSA and JP Morgan
    • Reverse enquiry: Whereby we uses our extensive region contacts to identify companies that fulfil the desired currencies and sectors criteria determined by the top/down overlay
    Deal sourcing
  • Overseas Private Investment Corporation (OPIC)
    • OPIC selected the Standard Bank Group to manage the African Development Fund
    • because of:
      • Our group’s strong presence in Sub Saharan Africa
      • Our long-standing experience in managing emerging market debt
    OPIC is a leading US Development Finance Institution The Fund is part of the Africa Financial Sector Initiative (AFSI) , announced by the US Government in early 2007 ahead of the G8 Summit By combining the incentives and ingenuity of investment banking with the social conscience investment ethos of the development world, the AFSI aims to lead to sustainable poverty reduction through the profit seeking ambitions of global market participants Part of the US Government’s AFSI Program
  • Our contacts Baldwin Berges Head of Distribution for Europe, Middle East Standard Asset Management, London +44 (0)207 8153870 [email_address] Mark Livingston Product Manager Standard Asset Management, New York +1 212 4075171 [email_address] Standard Bank Plc Cannon Bridge House Dowgate Hill London EC4R 2SB Standard New York 19 th Floor, 320 Park Avenue New York NY 10022 USA Standard Bank Plc Representative Office Emirates Towers 16 th Floor PO Box 504904 Dubai United Arab Emirates Addresses
  • Disclaimer Whilst every care has been taken in preparing this document, no representation, warranty or undertaking (express or implied) is given and no responsibility or liability is accepted by Standard Asset Management ("SAM") as to the accuracy or completeness of the information contained herein. SAM is an operating division of Standard Bank Plc ("SBplc"). SBplc is authorised and regulated by the Financial Services Authority ("FSA") and entered in the FSA’s register (register number 124823). SBplc or its affiliates, their directors, officers and employees may have a long or short position in currencies, investments or securities mentioned in this report or related investments, and may add to, dispose of or effect transactions in such currencies, securities or investments for their own account and may perform or seek to perform advisory or banking services in relation thereto. No liability is accepted whatsoever for any direct or consequential loss arising from the use of this document. Furthermore, the information contained in this document is for information purposes only and should not be construed as and offer to sell, a solicitation of an offer to buy or a recommendation for any security or as providing advice of any kind. The information has been compiled from sources we believe to be reliable, however SAM does not guarantee its accuracy or completeness. Opinions, forecasts, and estimates constitute our judgment as of the date of this report and are subject to change without notice. The investment products described are not FDIC insured and are not covered by the Financial Services Compensation Scheme in the United Kingdom. Distribution to the investing public or private customers is strictly prohibited. All rights to the content contained herein remain the exclusive property of SAM. Copying, duplication or re-publishing of the information contained in this newsletter is prohibited without the express written consent of SAM. (Compliance Reference LCSAM0716).