Published On: Thu, Jan 15th, 2015

Allan Gray Still Hopeful About Zimbabwe

Allan WB Gray


Zimbabwe equities hit a two year low, but Allan Gray Ltd is not worried, according to Moneyweb. Zimbabwe accounts for 23% of the company’s $235 million Africa ex-South Africa Equity fund, the largest exposure after Nigeria. The fund shed 7.7% in 2014. Zimbabwe’s Stock Exchange dropped 19%, the lowest of nine African indexes covered by Bloomberg.

Allan Grey has $39 assets under management, and has shares in Delta, the African branch of SABMiller, which makes Chibuku sorghum beer, and Econet Wireless Zimbabwe, the country’s leading mobile company. Although the Zimbabwe exchanged fell hard, it has had 5 up days in a row, the longest good streak since September.

Andrew Lapping,  a South African based manager for Allan Grey said, “If anything, we’re more positive on stocks because they’ve been pretty weak. We’ve never been positive on the outlook for the economy because they’re in a very tough place. What we’re positive on is the quality of some Zimbabwean businesses that have managed to weather difficult times well.”

Investec Asset Management says it is not buying shares of Zimbabwe stocks, even at current low levels. Economic growth in the country was only 3.1% compared to 10% between 2009 and 2012. Allan Gray finds solace in the dividend rates of the portfolio holdings. Delta raised its yield by 4%. Despite weakness in the larger economy, Econet saw subscribers grow by 6% and revenue rise by 4%.

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