“Africa reminds me of China back in 1999. If you missed China then, don’t do that (miss Africa) now,” is how Plamen Monovski, chief investment officer at Russia’s Renaissance Asset Managers, describes prospects for Africa. “It’s the last place in the world that is due for that rapid change and advancement.”
He was speaking in an interview with Reuters on 2 Dec. He said investors looking at China will find assets already “very discovered” and more expensive. He said African equities were trading at “exceptionally cheap” levels, while Chinese demand for natural resources and Chinese investments are boosting African business.
“The real appeal of Africa is the rise of the consumer society. Africa has got a population the size of India and consumer force as big as India,” he said. Renaissance is backing Africa’s infrastructure, consumer-related and financial sectors, as these will gain from growing prosperity within Africa, rather than commodities which depend on external growth.
The International Monetary Fund (IMF) in October said it expects 6% growth for sub-Saharan Africa in 2012, up from 5% in 2011. It is positive about the outlook because of growth in mining and other areas. Africa is seeing new entrants and efforts by the world’s largest banks and corporate, including large funds
Monovski helps manage $2.5 billion of assets. Renaissance’s funds include a sub-Saharan fund which has fallen about 17% since it was launched in October 2010 as investors pull out of risky assets in the current crisis. The fund includes South Africa’s teleco MTN Group and Nigeria’s Zenith Bank Plc among its top holdings. He joined the fund management arm of Russia’s Renaissance Capital from Blackrock last year.
He also said China will grow and will not have a “hard landing” of strong correction in the current crisis, but much growth is already priced into Chinese equities: “We want to look at other regions in the world which looked like China in the late 90s.”