INVESTING IN AFRICA

www.investinginafrica.net This Months Feature: Sonatel

With Ryan Shen-Hoover

Vol. 4, Iss. 11, November 2009

Dear Reader,
When I launched this newsletter back in early 2006, I intended to illustrate two things: 1) that a diverse portfolio of African stocks would outperform major market benchmarks and 2) how to put such a portfolio together. Looking back, I think we achieved the first objective. While it was far from a scientific study, and I made numerous boneheaded calls along the way (Simeka, Italtile, etc), our paper portfolio trounced the S&P500 and the MSCI Emerging Markets Index. Many picks failed to outperform the benchmarks, but the ones that did, did so in a big way.

IIA Portfolio Performance (March 2006 November 2009)

Contents Sonatel Real Money Port. Checkup: FNB Nam. Company Updates Portfolio Performance 2 4 5 7 8
Average IIA Return 29.6% Average S&P Return -10.4% Average EEM Return 7.0% 67% 57%

Picks That Outperformed the S&P500 Picks That Outperformed the EEM

Even the real-money portfolio, which failed to fully recreate the paper portfolio due to my inability to pump new capital into it every month, managed to eke out a win over the EEM. If I were starting over, I would also benchmark performance against the Market Vectors Africa Index (AFK), which launched last year. AFK is an exchange-traded fund thats heavily weighted toward South Africa, Egypt, Morocco, and mining companies, but also includes a number of sub-Saharan banks. Regrettably, I made much less headway toward my second goal proving that such a portfolio was feasible. In fact, I may have actually been more successful in illustrating how difficult it would be to set up and manage. Opening up one or two foreign brokerage accounts is one thing, but a dozen is quite another. The pages of paperwork, repeated trips to the notary public, international mailings, wire transfers, frustration with illiquid stocks, frustration with unresponsive brokers, and spotty reporting from both companies and brokerage houses would sap the enthusiasm of all but the most driven bargain hunter. So, in the absence of a single point of access, active investing in African stock markets will remain beyond most retail investors reach. Im encouraged, however, by the launch of the AFK and the Johannesburg Stock Exchanges efforts to attract crosslistings from some of the continents largest firms. The pace may be slow, but its becoming easier to put your money to work in Africa with each passing month. Thank you for exploring this investment frontier with me over the past few years. I hope you enjoyed the process of unearthing the continents stock market gems as much as I did. Happy Investing!

Ryan Shen-Hoover

SONATEL
C OMPANY P ROFILE
Bloomberg Ticker: SNTS:BC Market Cap (b): US$2.64 P/E Ratio: 6.9 Dividend Yield: 9.8% Return on Equity: 43.1% Return on Assets: 22.8% Avg Daily Volume: N/A Major Shareholders: France Telecom Govt of Senegal Sonatel Employees 42% 27% 5%

Recent Share Price

XOF120,000 (USD265.36)
Cumulative Performance of Sonatel vs. MSCI Emerging Markets Index
(in constant US$ terms)

60.00% 40.00% 20.00% 0.00%

Nov -08 Jan-09 Mar-09 May-09 Jul-09 Sep-09 Nov -09

- A generous West African telco that churns out wads of cash.

-20.00% -40.00%
Sonatel EEM

Fewer African industries get more press than its wireless one does. The continent-wide boom in mobile phone usage set off by rising incomes and innovative marketing to bottom-of-thepyramid consumers is a great story. Great stories, however, do not always make for great investments. Explosive growth has long been priced into many of the continents biggest mobile operators (Im looking at you Safaricom, MTN, and Zain), and intense competition means many market participants are on a race to the bottom in terms of profitability. This month, however, I believe weve found one of the most undervalued businesses in the sector. Its got room for growth and a huge head start on its existing competition. The Business Sonatel is a telecommunications group that operates in four French-speaking West African countries. In Senegal, it is the sole landline telephone company and controls two-thirds of the cellular market. In Mali, it is the leading wireless provider with an 82% market share. It also operates rapidly growing wireless businesses in Guinea and Guinea Bissau where it already boasts 25% and 19%

market shares respectively after setting up shop in 2007. Senegals wireless market is Sonatels bread and butter, accounting for approximately 56% of group revenue. At present it serves more than four million customers - 33% more than it did just 12 months ago. The company has grown its subscriber base so rapidly by heavily marketing prepaid simcards and by expanding its coverage area deep into the sparsely populated countryside. A network of over 100 solar-powered cellular towers now allows the company to boast that it can service customers in 95% of all Senegalese villages with 500 or more inhabitants. The Malian wireless operation is the next most significant contributor to sales, accounting for 31%. Its customer base is 3.1 million strong and grew at a 35% pace since June of 2008. The remaining share of sales comes from fixed-line telephony in Senegal, internet data services, and wireless in Guinea and Guinea Bissau. Theres lots of room for continued subscriber growth in each country of operation. The aggregate cellular penetration

rate in Sonatels markets is just 37%. This compares to penetration rates of 47% in Kenya (where the much-hyped Safaricom operates) and 32% in Zambia. Earlier this year, Sonatel signed a distribution agreement with Kirene, a large Senegalese beverage company. Under terms of the deal, Kirene will market prepaid Sonatel simcards branded with the Kirene logo. It appears to have been an inspired move. In the first two months of the partnership, Kirene has signed up 100,000 new users 20% of total new subscriptions in Senegal. Another intriguing development is the 2008 launch of Orange Money, a money transfer service similar to Safaricoms M-Pesa in Kenya. Sonatel has partnered with BICIS, a Senegalese bank, to roll out the program. Sonatel receives a small transaction fee each time an Orange Money customer sends or withdraws funds. As wireless penetration levels begin to near 100%, internet and data products must become bigger contributors to the companys top line. At the moment, they account for a rapidly growing (but small) three percent of group revenue. Sonatel looks well placed to do this. It

was the first internet service provider in West Africa and co-owns two undersea fiber-optic cables plus a stake in another thats under development. The companys interests in the cables are critical because they give the company a pricing advantage over non-owners. France Telecom (FTE) made a bid for control of the company in April. It already owns a big 42% and had hoped to acquire an additional 10% from the cash-strapped Senegalese government. The deal met with stiff resistance from unions and other Senegalese who claimed the deal smacked of colonialism. So, the transaction was scrapped, but the government still wants to reduce its holding. Theres been no word yet if these shares will be offered on the market or sold to a big investor. The Numbers Its clear that Sonatel is skilled at getting people to sign up for its service. It added 900,000 customers in the past six months! Unfortunately when your primary product is pre-paid wireless, growing subscriber rolls dont mean a whole lot unless those people are actually buying a lot of airtime. So, we as investors will want to keep our eyes on ARPU (average revenue per user) and the net profit margin. As of the end of June, Sonatel claimed 8.2 million customers across all of its geographic locations and product offerings. The ARPU during the previous 12 months came in at XOF79,311. Thats only a 2.8% drop from the ARPU for 2008. That doesnt look too bad, especially considering that the net profit margin widened from 25.0% to 30.6% for the same time period. Considering the capital demands of the telecom industry, Sonatel maintains very low debt levels. The long-term debt to equity ratio currently stands at 11.9%, which is in line with Safaricom (9.3%) and far better than Zain Zambia (34.9%). Note, too, that the companys debt level is skewed to the high side, because it secured a medium-term loan shortly before the balance sheet date. With most of its network now in place,

management can largely sit back and watch it spin off cash. And spin it does. Free cash flow over the past 12 months has approached XOF170 billion. That sum provides more than adequate coverage for dividend payments and debt finance. The Risks Sonatels primary revenue source, its Senegalese operation, is under increased pressure from competition. In the first half of the year, a Sudanese company, Sudatel, became the third entrant into the nations wireless market. It has subscribed 200,000 users to date. Its other competitor, Millicom, focuses on the low-income segment of the population. As the market becomes crowded, the chances of a price war increase.

will probably be constrained by its largest shareholder, FTE. The French multinational already owns telecom assets in most French-speaking countries, selling mobile service under its Orange brand. Therefore, its unlikely to support a Sonatel expansion drive that would cannibalize these operations. While good subscriber growth can probably be sustained for the next few years, geographic expansion will eventually become paramount. If the company cant find ways to add subscribers, they will need to figure out a way to forestall deterioration in ARPU. Thats easier said than done. Just ask AT&T and Verizon. Valuation The stock trades at just under 7x trailing earnings and 2.8x book value. I believe buyers at this price can expect annualized share appreciation of at least 10% over the next five years. That doesnt likely doesnt sound terribly enticing, but when you tack on a big dividend, I think youll agree that Sonatel shares look mighty attractive these days. Sonatel is a dividend-lovers dream. It has upped its generous payout every year since 2000, and typically sends 70% of earnings back to shareholders. Presently, the stock offers a 9.8% dividend yield. Please note that Senegal levies a 10% withholding tax on dividends. The figures Ive presented here take this into account. Sonatel trades on the Bourse Regionale des Valeurs Immobilieres (BRVM). Therefore, to purchase shares of the company, investors must open a brokerage account in Cote dIvoire. Conclusion

Sonatel is a dividend-lovers dream. It has upped its generous payout every year since 2000.
Competition looks set to heat up in Mali, too. Moroccos Maroc Telecom recently took a controlling stake in the previously government-run Sotelma. Political risk is high in Guinea and Guinea Bissau. Violence in both countries has claimed many lives in recent months. Its callous to say, but these events are unlikely to be detectable in Sonatels results. When election clashes paralyzed Kenya in early 2008, mobile traffic continued unabated. With most other big wireless players avoiding Francophone Africa, management is likely on the lookout for additional expansion opportunities. Burkina Faso would appear to be a good candidate given its proximity to Sonatels existing operations. In the main, however, the companys regional expansion

With its steady, generous dividend and healthy cash flow, Sonatel is a classic buy and hold stock. If you want exposure to the African wireless story, this is the stock for you. Ryan does not own shares of Sonatel.

SONATEL
Key Financials (XOF 000 000s)
Income Statement
FY 2006 Total Revenue Gross Profit Operating Income Net Income Earnings per Share (XOF) Net Profit Margin FY 2007 FY 2008 1H FY2009

409,299 281,847 185,460 130,628 13,063 31.9%

FY 2006

504,668 322,494 203,805 140,967 14,097 27.9%

FY 2007

546,652 343,592 194,104 Data Unavailable 136,578 13,658 25.0%

FY 2008

279,588 197,831 119,409 89,307 8,931 31.9%

1H FY2009

Balance Sheet
Cash and Equivalents Property, Plant, & Equip Intangible Assets Total Assets Long-term Liabilities Shareholders Equity

113,732 333,088 42,633 655,308 29,020 386,714

FY 2006

114,807 399,673 60,285 743,175 23,174 438,937

FY 2007

114,099 432,169 51,714 831,840 12,565 465,422

FY 2008

137,916 423,828 46,348 816,581 50,599 425,447

1H FY2009

Cash Flow Statement

Net Cash from Operations Capital Expenditure

Key Statistics
FY 2006 Dividends per Share Return on Equity Return on Assets FY 2007 FY 2008 1H FY2009

7,947 36.7% 21.4%

9,900 34.1% 20.2%

11,700 30.2% 17.3%

43.1% 22.8%

REAL MONEY PORTFOLIO

Trade Date
July 18, 2009 January 22, 2009 December 23, 2008 November 24, 2008 September 1, 2008 June 3, 2008 April 15, 2008 April 10, 2008 March 27, 2008 January 29, 2008 November 9, 2007 October 10, 2007 September 26, 2007 August 14, 2007 June 27, 2007 May 16, 2007 Total Average Return

Company
Protech Khuthele Dar es Salaam Community Bank Zain Zambia State Bank of Mauritius Gamma Civic Invicta Holdings Botswana Insurance MPICO Truworths CAL Bank Simeka Business Group Imara Holdings Ghana Oil Ghana Comm. Bank Onelogix Fan Milk

Gross Return ($ adjusted) MSCI EEM Rtn

33.6% -3.6% 89.3% 54.9% -22.5% -21.6% -44.9% -38.0% 55.4% 12.9% -73.5% -24.2% -40.5% -29.7% -61.9% 56.4% -4.1% 11.8% 63.2% 55.3% 80.5% -41.7% -35.7% -19.9% -20.5% -20.0% -43.1% -27.1% -28.7% -24.0% -10.2% -14.1% -11.1% -5.3%

CHECKUP: FNB NAMIBIA

COMPANY PROFILE
Bloomberg Ticker: FNK:NW Market Cap (m): US$291.2 P/E Ratio: 8.6 Dividend Yield: 4.8% Return on Equity: 21.6% Return on Assets: 2.7% Major Shareholders: FirstRand Bank Holdings 59.8% Govt Pension Fund 14.5% Standard Bank Noms 10.2% - Slow, but steady, headline earnings growth from Namibias leading bank.

Recent Share Price

NAD11.70 (US$1.45)

Cumulative Performance of FNB Namibia vs. MSCI Emerging Markets Index

(in constant US$ terms)

80.00% 40.00% 0.00%

Mar-07 Jul-07 Nov-07 Mar-08 Jul-08 Nov-08 Mar-09 Jul-09 Nov-09

-40.00% -80.00%
FNBN EEM

Namibias largest bank, FNB Namibia, has been a steady performer since we added it to our paper portfolio in March 2007. But the financial crisis hit Namibias mining-based economy hard, and it is not expected to fully recover until the second half of 2010. Does FNB Namibia offer enough upside for us to hold its shares for the duration of the slowdown? The Business FNBs earnings held up relatively well given the tough macroeconomic environment during its 2009 fiscal year. Diluted headline earnings per share increased 8.8% on net interest income growth of 7.4%. Non-interest income increased by a similar amount. These earnings would have been much better were it not for big losses in its insurance operations investment portfolio. The revaluation of its investment holdings resulted in a loss of NAD94 million, a figure equivalent to 17% of pre-tax income. On the underwriting side, the insurance business performed admirably. Net premium income increased by 15.6%. Life insurance accounted for approxi-

mately three quarters of the divisions earnings. But property insurance premiums grew rapidly by 56% to be precise. Operating expenses increased by 12.4%. The heavier spending was driven by costs related to the purchase of two mainframe computers in order to satisfy a government requirement that all bank IT infrastructure be localized. FNB had previously used mainframes based in neighboring South Africa. Hopefully, the investment will lead to improved efficiency in coming periods. The overall cost to income ratio increased from 46% to 50%. The bank grew its lending book by nearly 15%, which was led by significantly more lending to the building and property development sector. The balance sheet further shows that FNB reduced its average cash holding by 29%. Thats a good sign. It indicates that the bank is finding attractive places to invest its assets. Non-performing loans were up 9.3% and presently account for 3.2% of the total loan book. Apart from that, however, asset quality looks pretty good. The bank grew its deposit base by 10%

during FY2009, which helped solidify the capital adequacy ratio. The CAR now stands at 20.3%. Thats more than twice the level required by the Namibian central bank. Risks Competition remains one of the biggest risks to profitability. Four banks fight over a population of just two million citizens. FNB boasts a 30% share of the market, but the Bank of Windhoek has developed into a formidable rival. Its now nearly as large as FNB. Standard Bank and NedBank comprise the remaining market participants. A prolonged recession, of course, would weigh heavily on FNBs performance. The IMF expects Namibias economy to shrink by nearly a percentage point this year and then to expand by 1.8% in 2010. Finally, in an attempt to shorten the recession, Namibias central bank is pressuring banks to narrow their interest margins. FNB is obviously resisting such a move. A local broker (Simonis Storm Securities) estimates that bank profits would decrease by 25% if the Bank of Namibia insisted on a 100 basis point reduction to banks net interest

margins. Valuation FNB Namibia presently trades at an earnings multiple of 8.6 and 1.9x book value. Thats a slight discount to the valuations commanded by its South African peers. But Namibia is not South Africa. The South African economy is considerably more diverse, and its market is much more accessible. Thus, I dont put find valuations relative to FNBs Johannesburg-listed peers all that helpful. Instead, I estimate FNBs value via a residual income model. My model adds

the banks tangible book value per share (NAD6.12) to the present value of the residual income that I expect it to generate over the next ten years. I assume the bank will produce returns on equity ranging between 20% and 28% over the next decade. I further assume that it will pay out 40% of earnings as dividends each year. The bank is probably fairly valued for investors looking for a 15-16% annual return. Thats good stuff if you already have a Namibian brokerage account. If you dont already have money in Namibia, however, Id let this one pass by. There just doesnt appear to be a whole lot of value at this price. Consider me interested if the stock falls to NAD10.60

per stub. Management boosted FNBs dividend nearly 10% this year, giving the stock a yield of 4.8%. Conclusion FNB Namibia is a steady performer that appears to have reached its intrinsic value. It may be a nice hold for investors with the desire for exposure to the Namibian economy, but due to the constraints of its small market, it doesnt represent a compelling opportunity for most bargain hunters. Ryan does not own shares of FNB Namibia.

Key Financials (NAD 000s)

Income Statement
FY 2007 Net Interest Income Non Interest Income Net Ins. Premium Income Operating Income Pre-tax Income Net Income Headline EPS FY 2008 FY 2009 % change

543,272 378,793 120,231 447,368 434,560 304,348 1.14

656,502 403,127 159,842 581,431 568,708 409,067 1.25

704,805 433,434 184,761 561,979 551,348 366,759 1.36

7.4% 7.5% 15.6% -3.3% -3.1% -10.3% 8.8%

Balance Sheet
FY 2007 Loans and Advances Property and Equipment Total Assets Deposits Shareholders Equity FY 2008 FY 2009 % change

8,726,203 164,457 10,673,772 7,817,107 1,240,438

9,141,531 188,455 13,401,506 9,676,281 1,627,533

10,486,434 236,406 14,100,045 10,600,680 1,762,320

14.7% 25.4% 5.2% 9.6% 8.3%

Cash Flow Statement

FY 2007 Net Cash from Operations Capital Expenditure FY 2008 FY 2009 % change

146,052 -22,072

187,472 76,170

343,017 -87,352

83.0% -

Key Statistics
FY 2007 Dividends per Share Payout Ratio Return on Equity (ttm) Return on Assets (ttm) FY 2008 FY 2009 % change

1.37 120.2% 23.9% 3.0%

0.51 40.8% 28.5% 3.4%

0.56 41.2% 21.6% 2.7%

9.8% -

COMPANY UPDATES
Letshego, the Botswana-based microlender, posted 65% earnings growth for the first half of its 2010 fiscal year. A big share issue early in the period diluted earnings per share. Thus, per share earnings growth came in at a slower (but still impressive) 42%. What should be equally exciting for Letshego shareholders is the growing earnings contribution from the companys non-Botswana subsidiaries. Its early-stage operations in Swaziland, Tanzania, Uganda, Zambia, and Namibia contributed 23% of pre-tax income. Six months ago they accounted for just 17%. Unfortunately, one of the companys star subsidiaries ran into some serious trouble back in March. The government of Swaziland announced that it would end the practice of deducting loan payments from the payrolls of its civil servants. Apparently, some workers were borrowing from multiple payroll lenders. Some of them borrowed so much that their entire wage ended up being deducted to service their loans. Their paychecks amounted to zero. Given that 95% of Letshegos clients are government employees, this is a game changer for its Swazi operation. In fact, press reports indicate that it stopped lending money and laid off its sales staff. Its as yet unclear how the company will collect on its existing loans, but its likely that it will try placing debit orders on its borrowers bank accounts. Debit orders are a poor substitute for deduction codes. Why? Because deduction codes give loan repayments precedence over all other claims on a borrowers income. As long as the borrower remains employed, the lender will be repaid according to schedule. Collection via debit order, on the other hand, is dependent on borrowers depositing sufficient funds into their bank accounts. Therefore, non-performing loans will likely increase substantially in Swaziland. And if other countries where Letshego operates follow Swazilands lead, it would dramatically impact Letshegos profitability. Thus management is actively supporting measures to develop central credit registries. These registries would help governments set limits on how much civil servants can borrow. This would intensify competition by making the available market smaller, but it would allow continued use of deduction codes. In other news, the Mozambique government awarded Letshego a deduction code, clearing the way for it to begin lending there. The company also sold its legal insurance operation to Botswana Insurance Holdings. The profit from the sale will be reflected in the next earnings statement. Overall, I believe Letshego remains a compelling investment at current levels, but I am keeping my eyes peeled for more news on the deduction code front. LETSHEGO
Exchange: Botswana Recent Share Price: BWP13.70 Market Cap: $298.6 million P/E Ratio: 8.2 Dividend Yield: 2.2%

Its a problem that affects all African wireless operators and is the main reason that Im less bullish on the industry than some others. The company is touting its Zain Group Drive11 program which management says will introduce new products and revenue generating initiatives while reducing operating costs. In recent months, the company granted its prepaid customers the ability to use Blackberry devices and roaming in a selection of countries outside Zambia. It also opened a new operations center that will put its entire Lusaka staff under one roof. Still, it will take much more than this to meet the Drive11 goal of improving operating margins by 5% over the next few years. The company now trades right around 10x trailing earnings and 3.5x book value. In my view, its a rather rich valuation and offers little margin of safety. Im slashing my valuation estimate to ZMK455, and I plan to sell my position in the stock before the end of the calendar year. ZAIN ZAMBIA
Exchange: Zambia Recent Share Price: ZMK510.00 Market Cap: $558.8 million P/E Ratio: 9.8 Dividend Yield: 3.9%

Wireless company, Zain Zambia, reported anemic earnings growth of 4.9% for the first half of 2009 in spite of increasing its customer base by 23%. The net margin for the period narrowed to 19% from 22% a year ago. These figures illustrate the companys challenge pretty clearly. While Zambias mobile phone penetration rate remains relatively low, most people who can easily afford to own and use a phone already have one. To add additional revenue, Zain must content itself with substantially smaller margins. All the low hanging fruit has already been picked.

After a brutal 2008, Botswana Insurance Holdings continued to struggle during the first half of 2009. Earnings per share dropped 45% thanks to huge drops in the value of its investment portfolio. Net insurance premium revenue actually increased 32% and claims as a percentage of premiums dropped a few percentage points. So, the companys underwriting operation remains very profitable. As Ive mentioned in previous is-

sues, my preferred metric for valuing this company is embedded value per share. The measure discounts the profits that BIHL expects to earn on life insurance premiums and then adds them to net asset value. As of the end of June, embedded value came out to BWP7.09 per share. The stock presently trades at a 17% premium

to that mark. Considering the rebound that weve seen in global equity markets since June, that may not be a bad price. The year-end results should see the value of the companys investment portfolio rebound strongly. Given the excellent underwriting profit BIHL generates, Im content to hold the stock at this price.

BOTSWANA INSURANCE
Exchange: Botswana Recent Share Price: BWP8.30 Market Cap: $334.5 million P/E Ratio: 17.3 Dividend Yield: 9.8%

Ryan owns shares of Letshego, BIHL, and Zain Zambia.

PORTFOLIO PERFORMANCE
Issue
November 2009 October 2009 September 2009 August 2009 July 2009 June 2009 May 2009 April 2009 March 2009 February 2009 January 2009 December 2008 November 2008 October 2008 September 2008 August 2008 July 2008 June 2008 May 2008 April 2008 March 2008 February 2008 January 2008 December 2007 November 2007 October 2007 September 2007 August 2007 July 2007 June 2007 May 2007 May 2007 March 2007 February 2007 January 2007 December 2006 November 2006 October 2006 September 2006 August 2006 July 2006 June 2006 May 2006 April 2006 April 2006 March 2006 March 2006 Total Average Return

Company
Sonatel PME Africa Infra. Opps. Trustco Holdings Ecobank Transnational Protech Khuthele Car and General Hardware Warehouse ArcelorMittal SA Kenya Power & Lighting Africa Cellular Towers Dar Community Bank Zain Zambia State Bank of Mauritius Pinnacle Technology Dangote Sugar RACEC Group Kenya Comm. Bank Invicta Holdings Gamma Civic Truworths Botswana Insurance Namibia Breweries CAL Bank MPICO Simeka Business Group Ghana Oil Imara Holdings Ghana Commercial Bank OneLogix Unilever Ghana Investrust Bank FMB Malawi FNB Namibia Grindrod dfcu Group Bytes Technology Guaranty Trust Bank Fan Milk Oryx Properties NICO Holdings New Mauritius Hotels Zambeef Kenya Airways Italtile Telkom Letshego Furnmart

US$-Indexed Rtn
3.55% -10.48% 6.30% 18.36% 32.68% 17.20% 85.03% 52.75% -21.06% -5.99% 22.88% 35.70% -8.50% -48.01% -32.77% -47.97% -24.18% -27.93% 62.04% -51.61% 18.18% 34.96% -56.98% -73.31% -40.09% 62.71% -13.92% -62.22% 92.82% 0.25% 137.58% 39.66% -0.72% 68.52% 46.55% 45.66% 148.97% 35.35% 185.17% 168.82% 218.79% -21.02% -61.91% -30.64% 172.07% 188.96% 29.61%

S&P 500 Rtn

-1.98% 1.53% 5.81% 12.71% 12.73% 18.72% 32.49% 40.96% 25.46% 14.72% 15.62% 6.96% -11.16% -19.23% -18.25% -19.05% -34.35% -30.08% -22.84% -22.13% -24.83% -12.64% -30.04% -33.12% -32.13% -11.99% -28.79% -31.07% -40.99% -30.10% -39.54% -26.35% -27.95% 3.53% 5.75% -24.80% -12.69% 1.45% -18.84% 0.77% 10.26% 16.79% -43.69% -1.94% -19.64% -32.31% -10.35%

MSCI EEM Rtn

-3.62% 6.32% 6.05% 16.48% 12.94% 30.85% 56.99% 75.09% 65.74% 50.34% 63.57% 47.62% 9.86% -5.80% -12.31% -16.86% -36.09% -47.98% -21.17% -19.34% -17.73% -20.46% -26.93% -32.64% -24.64% -8.45% -15.45% -13.97% -40.97% -6.80% -43.02% 1.83% -1.47% 31.65% 42.36% 10.25% 7.44% 39.62% 18.86% 46.32% 63.76% 22.05% -34.11% 38.78% 17.88% -9.91% 7.02%

African markets may expose investors to any or all of the following risks: currency fluctuations, political and economic instability, accounting changes and foreign taxation. The Investing in Africa newsletter is not intended to provide tax, legal, or investment advice for any fact-specific situation. All information contained herein is solely the opinion of Investing in Africa and is obtained from sources believed to be reliable. All content and opinions herein are presented without warrant of any kind express and implied and are subject to change at any time without notice.