Imara opens door to Africa’s rising bourses

STOCKBROKERS Imara SP Reid this week launched an African investment platform that will, for the first time, allow retail investors to trade directly on stock exchanges around the continent and the rest of the world.

This will give South African investors the opportunity to cash in on the growth on 17 African stock exchanges as well as several other bourses in the Americas, Asia, Europe and Australia — essentially everywhere that African assets are quoted.

This is some bait: in the six months to April, the all-share index of Ghana has gained 61%, Uganda’s index has grown 29% and Zimbabwe’s has climbed 24%. By contrast, South Africa’s All-Share index has lost ground this year.

Imara has taken several years to put together this platform, having had to overcome the difficulty of straddling multiple jurisdictions and regulatory environments. Until now, South African retail investors have had to rely on buying unit trusts that hold African shares.

Brian Mugabe, Imara’s head of Africa research, said there was a strong case for investing in Africa’s emerging economies. This included that these countries had less debt than their developed-world peers, rising GDPs and improving regulatory environments, and a greater proportion of working-age people looking to buy consumer goods as they push into the middle class.

Investing on African exchanges had its challenges, said Mugabe. Liquidity could be an issue, so retail investors might need to be slightly more flexible on price. He said the majority of exchanges were encouraging more listings and investors intent on taking advantage of Africa’s growth story had to be looking at the longer term anyway.

Simon Reid, head of Imara Africa Securities, said this new platform provided wider access to the continent than was offered by any other fund manager. “This is a response to client demand and there is currently no other equally flexible offering. It will be years before anyone else can copy this platform.

“Using asset swaps, we can allow local clients to take out large sums that exceed Reserve Bank allowances. The platform is also available to nonSouth African customers.”