Kenya’s fund managers confident about Africa’s economies, says survey

By Lewis Njoka
Wednesday, September 30th, 2020
Most fund managers are optimistic about prospects of the continent’s economies and investment opportunities. Photo/PD/File
In summary

GROWTH: Over half of fund managers in Nairobi are optimistic about prospects for Africa’s economies, a survey has revealed.

A survey of 50 fund managers across Africa conducted by the African Exchanges Linkage Project (AELP) found that 65 per cent of fund managers in Nairobi are optimistic about Africa’s economy.

Nigerian fund managers are the most optimistic at 97 per cent,with average assets of $364 million (Sh39.49 billion) under management, followed by 85 per cent of surveyed francophone asset managers, who averaged $416 million (Sh4.51 billion) of assets managed,” according to the study.

It found optimism to be also strong among asset managers surveyed in Mauritius (80 per cent), Morocco (73 per cent), followed by Kenya and Egypt each with 65 per cent. “

World-class standards

Edoh Kossi Amenounvé, the President of African Securities Exchanges Association (ASEA) said the results of the survey confirm the high level of professionalism of African fund managers using world-class standards and criteria in their decision-making. 

“This is really reassuring for the success of the AELP initiative,” he added. 

The AELP exchanges include Bourse Régionale des Valeurs Mobilières (BRVM) which integrates eight West African countries, Casablanca Stock Exchange, The Egyptian Exchange, Johannesburg Stock Exchange, Nairobi Securities Exchange, The Nigerian Stock Exchange and Stock Exchange of Mauritius.

Dealing price

Done for the African Exchanges Linkage Project, a joint initiative by the ASEA and the African Development Bank, the survey further reveals market regulation topped at 91 per cent for considerations fund managers make before investing in various markets.

Others are levels of dealing price, efficiency of execution and commission (86 per cent), the quality of companies and investment opportunities (86 per cent), corporate, social and governance criteria (84 per cent) and availability of research (80 per cent).

“Three-quarters of investors said they were reluctant to invest in small and illiquid markets or where valuations are excessive.

Only half decide to invest in a company based on its dividend policy,” says the survey.  

The poll evaluates the appeal of different investment markets in the AELP, which brings together seven leading African securities exchanges to boost trading, investment and information links.