My note about M-Pesa yesterday drew a note by Kenn from Kenya via Canada. He visited his Nairobi-based daughter over Xmas and that she used the cellphone payment system to pay for taxi cabs and everything under the sun. “It is slick as a whistle, fast, and trouble free. I predict it will take over the world.” My reply in Swahili was: Jambo (hello). Asanti sana (thank you).
Oops 2: Reader Van pointed out that the cost of a gas pipeline cannot be $1 per mile and is likely to be $1 mn/mile. He gets a 3-mo sub extension for correcting Maurice’s correction. This is becoming costly.
Today is April Fool’s Day. A US banker, Bob Diamond, is ex-CEO of Britain’s venerable Barclay’s Bank, the old Quaker institution which bought most of Lehman Brothers in 2009. He was removed in 2012 at the orders of the Bank of England, the UK central bank, for failing to control staff manipulating interest and exchange rates.
Mr Diamond and partners have created a new fund to invest in Africa, Atlas Mara. It raised $325 mn from investors and just announced its first deal, to buy Botswana’s BancABC, with a third of its business in Zimbabwe. It will pay $265 mn in cash and shares. This is no April Fool’s joke. It’s real.
Our sole Zimbabwe holdings are via a closed-end fund. You cannot buy in the Zimbabwe or Botswana stock markets as a non-resident retail investor. You cannot even buy in Kenya where I tried to open an account on my last safari. Our fund’s strategy is based on market arbitrage similar to what I think lured Mr Diamond into ABC: that the Zimbabwe stock exchange can be a cheap back-door way to acquire cheaply assets elsewhere in Africa countries. We already have a return of 17% on this fund only bought in mid-Dec. 2013.
More on this and other news from around the globe in today’s global investing including lots on closed-end funds where we invest our starter portfolio, for those with $20,000 to invest outside the US. Plus another article on the perils of Africa investment for a metals giant, news from Guinea and Ethiopia, Belarus, and Russia, Mongolia, and China plus staid old Canada, Ireland, Holland, Israel, Singapore, and Britian.
Our holding is Africa Opportunity Fund, AROFF in the US or AOF in London, a Cayman Island registered closed-end fund currently in London on the Alternative Investment Market, their Nasdaq. It is up 7% today. As part of a capital increase via convertible shares, the fund is moving to the main London Stock Exchange, one reason for the boost in its share price. I must admit I knew this before the information was public and even mistakenly wrote that it had already been done in my first article on AROFF.
