Economic reforms in Nigeria excite Imara market watchers

Despite recent unrest and protests over higher fuel prices, pan-African financial services group Imara has told international investors it is ‘excited’ about long-term positives springing from Nigeria’s economic reforms.

Botswana-listed Imara monitors the West African markets closely as it markets a focused Nigerian investment fund to leading international asset managers and ‘frontier market’ investors. In addition, Nigerian assets are strongly represented in its Imara African Opportunities Fund, a product that covers a wide range of sub-Saharan investment markets.

Rishay Lalla, co-manager of the Imara Nigeria Fund, noted: “We are excited about the economic reforms being implemented in Nigeria. President Goodluck Jonathan now has four years to implement the key reforms in the power and fuel sectors.”

President Jonathan has already removed a significant portion of longstanding fuel subsidies and Imara expects remaining subsidies to be phased out in due course.

“This will result in huge fiscal savings and ultimately enable private sector players to enter the refining industry so that Nigeria no longer needs to import refined products.

“As we saw in Zimbabwe during the hyperinflation years, any internationally tradable good subject to price control will cost the country dear - and make the chosen few very rich.

“The passing of the Petroleum Industry Bill will be the next milestone to watch for.”

Imara investment researchers acknowledge that a new Islamist protest group has carried out a series of bombings, but add that the bombs had no effect on local equity markets so far.

The cutting of petrol subsidies and higher fuel prices also triggered unrest. However, the subsidy cut will boost government finances and seems to have reduced illegal round-tripping too (importing subsidized petrol and selling it in neighboring countries for the full price).

Imara’s Nigeria specialists note that “this subsidy soaked up 25% of total government spending so the tax rise represents a fairly significant structural reform”.

Furthermore, “running a tight monetary policy and a balanced budget should be currency positive” for the Nigerian Naira especially as the country also runs a large current account surplus.

Imara is an independent, Botswana-listed investment banking group that prides itself on objective decision-making in the service of its clients. The company is mid-sized and has offices in Angola, Botswana, South Africa and the UK and associate offices in Malawi, Mauritius, Zambia and Zimbabwe. Imara has also partnered with Chapel Hill Denham in Nigeria, NIC Capital in Kenya, Namibia Equity Brokers and Mac Capital in Dubai.

The Group is an active participant in Africa's financial markets and maintains extensive research coverage of regional equities.

Imara provides a range of specialised financial products and services that can be broadly categorised as:

• Asset management (institutional and private client)
• Corporate finance and advisory services
• Securities
• Trust and administration services

Imara Group subsidiaries are regulated by: NBFIRA in Botswana, the FSA (UK), the FSB, JSE, SAFEX (South Africa), SEC, ZSE and Reserve Bank of Zimbabwe, the FSC (Mauritius) and the Reserve Bank of Malawi.
 

ISSUED ON BEHALF OF:	IMARA
BY:	CLEAR DISTINCTION COMMUNICATIONS
CONSULTANCY CONTACT:	Carol Dundas Tel: 011 444-0650 Mobile: 083 447 6648 Email: carol@cleardistinction.co.za
IMARA CONTACT:	Rishay Lalla Tel: +263 4 700000, 790606/590/164        +263 772209252

Kenyan listings upsurge on the way – Imara

A flurry of listing activity is expected in Kenya, according to Imara, the pan-African financial services group that publishes regular in-depth investment research reports on the East African region for the benefit of international investors and fund managers.

In its latest East Africa report, Imara says Deacons, Kenya’s leading lifestyle retailer, plans to list in the third quarter of this year. The business recently reported year-on-year earnings growth of 51%.

Another company on the growth path, Longhorn Publishers, also plans to list. The publisher reported 109% growth in last year’s earnings on the back of a Kenyan government programme that distributes free text books to all primary schools.

Also on the listings trail is insurer CIC Insurance, says Imara’s East Africa specialists, while Umeme, the Ugandan energy distributor owned by Actis Capital, has similar plans.

Recent developments underpin a positive Kenyan market view at Imara.

The Botswana-listed group notes: “With fuel and electricity prices declining as well as reduced political uncertainty and pessimism, prospects for the Kenyan market are improving.”

• Imara is an independent, Botswana-listed investment banking group that prides itself on objective decision-making in the service of its clients. The company is mid-sized and has offices in Angola, Botswana, South Africa and the UK and associate offices in Malawi, Mauritius, Zambia and Zimbabwe. Imara has also partnered with Chapel Hill Denham in Nigeria, NIC Capital in Kenya, Namibia Equity Brokers and Mac Capital in Dubai. The Group is an active participant in Africa's financial markets and maintains extensive research coverage of regional equities. Imara provides a range of specialised financial products and services that can be broadly categorised as:
• Asset management (institutional and private client)
• Corporate finance and advisory services
• Securities
• Trust and administration services

Imara Group subsidiaries are regulated by: NBFIRA in Botswana, the FSA (UK), the FSB, JSE, SAFEX (South Africa), SEC, ZSE and Reserve Bank of Zimbabwe, the FSC (Mauritius) and the Reserve Bank of Malawi.

ISSUED ON BEHALF OF:	IMARA
BY:	CLEAR DISTINCTION COMMUNICATIONS
CONSULTANCY CONTACT:	Carol Dundas Tel: 011 444-0650 Mobile: 083 447 6648 Email: carol@cleardistinction.co.za
IMARA CONTACT:	John Legat Tel: +263 4 72-9335 / 70-000        +27 72 312 5194

Imara: Zim corporate restructuring spree on the way

A spate of corporate restructurings is on the cards in Zimbabwe, predicts Imara, the pan-African financial services group with a strong operational base in the southern African nation.

Grant Flanagan, manager of Imara’s specialist Zimbabwean investment fund, has alerted international investors to the prospect of an upcoming ‘spree’.

In his last report to investors he said investment firm Lonzim Plc had announced it was now ready to operate without support from Lonrho Plc and “as such there will be four changes to the board at the AGM should all resolutions be approved by shareholders”.

The company is also likely to change its name.

In addition, said Flanagan, Ariston Holdings, the export-driven agri-business, had published a cautionary notice stating that a major transaction is being negotiated that could result in a change to shareholder structure and a recapitalisation of the business.

Furthermore, Riozim, the investment company with interests in mining and energy, has published a statement announcing that it has accepted an offer that would resolve its indebtedness and provide a way forward.

The statement follows an application by a consortium of banks for the company to be put into judicial management.

Flanagan commented: “This may have motivated management to accept the offer.”

• Imara is an independent, Botswana-listed investment banking group that prides itself on objective decision-making in the service of its clients. The company is mid-sized and has offices in Angola, Botswana, South Africa and the UK and associate offices in Malawi, Mauritius, Zambia and Zimbabwe. Imara has also partnered with Chapel Hill Denham in Nigeria, NIC Capital in Kenya, Namibia Equity Brokers and Mac Capital in Dubai. The Group is an active participant in Africa's financial markets and maintains extensive research coverage of regional equities. Imara provides a range of specialised financial products and services that can be broadly categorised as:
• Asset management (institutional and private client)
• Corporate finance and advisory services
• Securities
• Trust and administration services
Imara Group subsidiaries are regulated by: NBFIRA in Botswana, the FSA (UK), the FSB, JSE, SAFEX (South Africa), SEC, ZSE and Reserve Bank of Zimbabwe, the FSC (Mauritius) and the Reserve Bank of Malawi.

Shareholders approve Farmers House merger – Imara

The way is clear for the planned merger of Farmers House Plc, Zambia’s sole listed property company, and Arcades Development Plc, say the corporate finance specialists at Imara Botswana Ltd.

Farmers House shareholders approved the merger at a reconvened extraordinary general meeting (EGM) held in Lusaka on 27 January 2012. All other EGM resolutions were approved, including the issuing of new shares to Arcades shareholders, the authority for Farmers House to buy back its own shares, the change of name from Farmers House Plc to Real Estate Investments Zambia Plc and the election of two new directors to the Board.

The consideration for the shares in Arcades Development Plc, totalling $25 million, is to be settled partly in cash ($15 million), while the balance will be settled by way of a share swap for new Farmers House shares at the swap rate of one Farmers House share for every 1.69 Arcades shares.

The transaction enables strategic diversification of the property assets in the Farmers House portfolio. Arcades Development owns the Arcades shopping centre in Lusaka. Three additional developments are under way.

Grant Molyneaux, corporate financial executive at Imara Botswana, said finalisation of the merger was imminent, subject to regulatory approvals and formal approval by the Arcades shareholders.

Imara Botswana Ltd, assisted by Stockbrokers Zambia, holds the merger mandate.

The new Farmers House shares being issued are expected to be listed on the Lusaka Stock Exchange on or about 29 February 2012. Stockbrokers Zambia is the sponsoring broker.

• Imara is an independent, Botswana-listed investment banking group that prides itself on objective decision making in the service of its clients. The company is mid-sized and has offices in Angola, Botswana, South Africa and the UK and associate offices in Malawi, Mauritius, Zambia and Zimbabwe. Imara has also partnered with Chapel Hill Denham in Nigeria, NIC Capital in Kenya, Namibia Equity Brokers and Mac Capital in Dubai.

The Group is an active participant in Africa's financial markets and maintains an extensive research coverage of regional equities. Funds under management exceed US$450m and assets under administration exceed US$1.77 billion.
Imara provides a range of specialised financial products and services that can be broadly categorised as:

• Asset management (institutional and private client)
• Corporate finance and advisory services
• Securities
• Trust and administration services

Imara Group subsidiaries are regulated by: NBFIRA in Botswana, the FSA (UK), the FSB, JSE, SAFEX (South Africa), SEC, ZSE and Reserve Bank of Zimbabwe, the FSC (Mauritius) and the Reserve Bank of Malawi.

ISSUED ON BEHALF OF:	IMARA
BY:	CLEAR DISTINCTION COMMUNICATIONS
CONSULTANCY CONTACT:	Carol Dundas Tel: 011 444-0650 Mobile: 083 447 6648 Email: carol@cleardistinction.co.za
IMARA CONTACT:	Grant Molyneaux Tel: + 27 11 550-6002       +27 72 494 1725

Cape Town proving ground for Imara's CSI breakthrough

Cape Town and Khayelitsha have become the proving ground for a unique approach to corporate social responsibility that assists creative photo-entrepreneurs from disadvantaged communities.

The Imara Lightwarriors photographic bursary-cum-mentorship programme is championed by pan-African financial services group Imara in partnership with the Cape Town-based brand art specialists at Pitchblack.

First beneficiary is Teddy Sambu (22), a start-up photographer from Khayelitsha who began his own micro-business without formal training, little equipment and zero capital. He was selected by Pitchblack and Imara and has now enrolled at Cape Town School of Photography. Imara meets tuition fees and living expenses.

Business skills are also developed while Cape Town photographers Athol Moult and Damon Hyland provide hands-on mentorship.

Pitchblack creative director, artist and photographer, Athol Moult, who developed the Lightwarriors concept, applauded Imara for supporting entrepreneurship in a creative niche.

He added: “The Lightwarriors vision calls for an integrated package of assistance covering education, on-the-job training, small business development and photographic commissions to assist the bursar. We simultaneously foster an Africa-wide vision of creative excellence.”

The Lightwarriors programme includes an annual photo-safari into Africa, giving Teddy Sambu a chance to work with Athol Moult while photographing subjects for incorporation in the Imara art collection. Selected work will be submitted for inclusion in Imara’s annual report.

David Stone of Imara noted: “Lightwarriors is an optimal CSI platform for Imara. We contribute to capital market development across Africa, but the starting point for economic progress is the one-man business. The start-up township photographer showcases the commitment, self-belief and sweat-equity valued by Imara.

“We also looked for a vehicle that reflects our love of Africa. A photographic scholarship is ideal as it enables disadvantaged young people to capture and celebrate the changes taking place across our continent.”

ISSUED ON BEHALF OF:	IMARA
BY:	CLEAR DISTINCTION COMMUNICATIONS
CONSULTANCY CONTACT:	Carol Dundas Tel: 011 444-0650 Mobile: 083 447 6648 Email: carol@cleardistinction.co.za
IMARA CONTACT:	Dave Stone Tel: (011) 550 6102

Key date set in ground-breaking Farmers House merger - Imara

Farmers House Plc, Zambia’s leading listed property company, has set the date for the next step in its plan to merge with Arcades Development Plc, thereby achieving strategic diversification of its property assets.

Several shareholder approvals are necessary to facilitate the transaction, and to that end an extraordinary general meeting (EGM) is to be convened in Lusaka on December 16.

Shareholders at the EGM will be asked to approve the merger with Arcades, the issue of new shares to enable a share swap and the go-ahead for Farmers House to buy back its own shares. In addition, shareholders will be asked to sanction a change of name of the Company to Real Estate Investments Zambia PLC (REIZ) and the election to the board of two new directors.

Following approval at the EGM it is planned to carry forward the merger by purchasing 50% of the shares in Arcades Development for cash, and the remaining shares to be swapped for new Farmers House shares at a rate of one Farmers House share for every 2.46991 Arcades shares held.

The merger mandate is held by Imara Botswana Limited, assisted in the mandate by its Zambian associates, Stockbrokers Zambia. Stockbrokers Zambia is also the sponsoring broker.

Arcades Development PLC owns the Arcades shopping centre, a landmark Lusaka retail development with a gross letting area of 18 382m². Three additional developments are currently under way – the Parkway property on Kafue Road, Lusaka, the multi-use Solwezi property and a four-star boutique hotel at the Arcades shopping centre.

Grant Molyneaux, corporate finance executive at Imara Botswana, said the transaction was designed to add shareholder value by enabling Farmers House to diversify its portfolio.

Mr Timothy Mushibwe, Chairman of Farmers House, said that Farmers House has traditionally concentrated on office and commercial property developments. “The merger with Arcades will bring the first high profile retail centre into the Farmers House mix, with potential expansion in this area under consideration.”

Robin Miller, Managing Director of Farmers House, said “The transaction will add value to shareholders and the Board feels the merger fulfils the strategic vision previously presented to Farmers House shareholders.

“The transaction already has the approval of Arcades shareholders and directors, with a combined 78.9% shareholding in Arcades, and we anticipate that our bid will be welcomed by the Arcades minorities. Various regulatory approvals are also required, but we are confident the process will be finalised early in the New Year when it is expected that the new Farmers House shares will be listed on the Lusaka Stock Exchange.”

• Imara is an independent, Botswana-listed investment banking group that prides itself on objective decision making in the service of its clients. The company is mid-sized and has offices in Angola, Botswana, South Africa and the UK and associate offices in Malawi, Mauritius, Zambia and Zimbabwe. Imara has also partnered with Chapel Hill Denham in Nigeria, NIC Capital in Kenya, Namibia Equity Brokers and Mac Capital in Dubai.

The Group is an active participant in Africa's financial markets and maintains an extensive research coverage of regional equities. Funds under management exceed US$450m and assets under administration exceed US$1.77 billion.
Imara provides a range of specialised financial products and services that can be broadly categorised as:

• Asset management (institutional and private client)
• Corporate finance and advisory services
• Securities
• Trust and administration services

Imara Group subsidiaries are regulated by: NBFIRA in Botswana, the FSA (UK), the FSB, JSE, SAFEX (South Africa), SEC, ZSE and Reserve Bank of Zimbabwe, the FSC (Mauritius) and the Reserve Bank of Malawi.

Laying the Track

Imara's head of asset management John Legat tells Africa FM why Zimbabwe is well and truly back on the map, and how his firm's Africa Series of funds is laying the groundwork in preparation for a new era in Africa investment

"While there is a lot of interest in Africa, getting investors to actually commit money is very hard at the moment, particularly in Europe and the US," says John Legat, head of asset management at Imara Asset Management, an Africa specialist whose investor base primarily comprises clients from these troubled geographies.

"Generally speaking volumes have come off around Africa which tells you that there is not a lot of selling going on but also not a lot of buying," he says, although Legat adds that sentiment towards Africa remains strong, in spite of the liquidity squeeze.

"There is a lot of interest in Africa, because we saw in the global financial crisis that the region doesn't have the global links that other emerging markets tend to have, and so the growth we're seeing in Africa is driven much more by domestic demand and government reform. There are several factors at play that are less influenced by what is going on in rest of the world."

The bulk of Imara's $390 AUM is European money, typically from the UK, Switzerland and Netherlands, with the US a growing market for the firm and South Africa a new but increasingly important component of its investor base. According to Legat, the majority of investors still want pan-African exposure at this stage, although Scandinavian investors are showing an intrerest in country-specific allocations - the start of what Legat believes will be a trend that plays into the hands of his firm's Africa fund offering.

lmara, which manages money out of South Africa, Kenya, Zimbabwe and the UK. is well positioned to capitalise on interest from first-time or more sophisticated Africa investors, having established a broad suite of both regional and niche Africa products since the launch of its asset management business in 2003.

The firm's flagship fund is the $120m Imara African Opportunities Fund, a pan-African equalities vehicle launched in 2005 that scooped the Africa Equity Fund of the Year Over $50m award at October's Africa Fund Manager Performance Awards after achieving an outstanding 12-month return of nearly 26% to 30 June. But for those investors keen to access a more focused slice of the Africa story, lmara has also developed a range of equity funds under its lmara Africa Series umbrella.

"When we launched the umbrella fund we took the view that this was going to be a five- to 10-year product," explains Legat. "In the institutional investor space you need to build up a three- to five-year track record. A pension fund in Europe is not going to invest in a fund with less than a three-year track record, so we decided to build up that record so that when institutional investors decide they want to add, for example, some more Nigeria to their portfolio, we have got the fund, the manager and the track record."

The series, which Legat says has so far proved popular primarily with funds of funds, comprises Nigeria, Zimbabwe and East Africa regional funds, as well as an African Resources fund, which won the Africa Equity Fund of the Year Under $50m prize at the same ceremony after racking up a 42% return in the judging period. "The best performing fund [in the series] was the resources fund, which doubled in value from its launch in December 2008 to the end of June," says Legat.

"We launched the African Resources Fund close to the bottom of the financial crisis when resource stocks got pummelled as we felt it was too much of an opportunity to miss. We seeded the fund with our own money because it was hard to market anything back then and it has turned out to be a very good performance," he explains.

IMARA AFRICAN OPPORTUNITIES FUND

Imara's Flagship African Oppotunities is focused largely on sub-Saharan Africa ex-South Africa, with Zimbabwe (21%) its largest geographical exposure at 30 September, followed by Nigerra (20%), Zambia(15%). Kenya (13%) and Botswana (8%): and Egypt accounting for just 3%. 'Most of our Investors
don't want South Africa. We also don't have much exposure to North Africa says head of asset management John Legat pointing to historical expensive valuations, ongoing political risk and the fact that many of the firm's Investors access this region through Mena Funds. The fund Invests primarily in consumer sectors, with beverages the largest sector allocation at 30 September (23%) and tobacco accounting for 5% of the fund. Banking was the second biggest sector exposure at 18%. "The focus in Nigeria is in domestic demand, and In Zimbabwe again breweries are the biggest focus. While the Nigerian banking sector has got through its problems and is looking very cheap, the central bank is keeping a very tight monetary policy at the moment and bank lending is only just beggining to pick up, and our overweight remains consumer stocks," says Legat who describes Zambia's economy as not on the radar but pumping, not just in mining but also agriculture", and Botswana as a "market for 2012."

PERFOMANCE AWARDS

African Equity Fund of the year over $50M
Imara African Opportunities Funds

• 1 year Return: 25.87%
• 1 year Standard deviator (SD): 12.69%

African Equity Fund of the year under $50M
Imara African Resources Fund

• 1 year Return: 41.94%
• 1 year SD: 20.28%