Peter C. Thoms, CFA, is Founder and Portfolio Manager of Africa Capital Group LLC. In his exclusive interview with the Wall Street Transcript, Mr. Thoms details how he put his lifelong experience living in Africa to work uncovering the top tier of African publicly traded equities.
The reasoning behind an exposure to African securities is based on the future growth in consumer spending for the young population: “…the striking difference between Africa and most of the rest of the world are the demographics and how Africa is by far the youngest continent. Actually, with the average African being only 19 years old, it’s by far the youngest region, and so most of the consumer spending lies in the future for much of the population.”
One result of this youthful population is the explosive growth of leapfrog technology companies: “Safaricom (NSE:SCOM), for example, is a dominant mobile phone service provider in Kenya, and they are catering to a very young and increasingly tech-savvy urbanizing population…The thing we like about Safaricom is that it also is the owner of a system called M-Pesa, which means mobile money in Swahili, and it’s a system by which someone can text, basically text someone money from their M-Pesa account to the other person’s M-Pesa account. ”
Another Kenyan based company that is creating real returns for investors is “KenolKobil (NSE:KENO)…,a company, Nairobi, Kenya-based company, that is a service station owner, or gas stations…this is a theme that plays right into the growing power of the urbanization of the African consumer…KenolKobil is about a $250 million market cap, run by a sharp guy, and we think it’s got plenty of growth potential over the next several years.”
Mr. Thoms reveals the rest of his top picks and details on his investment philosophy in his exclusive interview in the Wall Street Transcript.