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Africa Market and Lombard Fund News







Monthy Report- October 2018

19 Nov 2018

 

Dear Investors

 

Poor investor sentiment left emerging assets strongly underweight in the global basket. Fund redemptions in illiquid markets forced good and bad quality risk assets even lower than last month. However, things are looking up. Reductions in the energy price and some rotation out of US assets have provided support for emerging assets towards the end of the month.

Our fund liquidated some of our underperforming risk assets. Given that the panic sell-off has affected good and bad companies equally, we have reduced positions in financials, telco’s and diversified industrials as well as our exposure to South Africa and Egypt. By taking a defensive stance, we hope to find opportunities to enter good quality assets are very low valuations.

Most of the African economies were in defensive mode with little macro-economic data to review. However, we did note that Kenya proposed increased taxes on Safaricom. The shares fells as the government did not provide immediate clarity on whether there will be any additional taxes applied. Further, increased taxes on fuel will lead to price increases in major consumer products, transport and basic commodities, the impact of which on consumers is unclear.

 

Looking forward to our next communication.

 

Constant Capital

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