S&P Africa Frontier Total Return Index rose 2.2% in April, better than other frontier markets (MSCI Frontier Markets xGCC Net +0.8%). Nigeria rose 2.3%, while Kenya rose 2.4%. Best SSA performer in April was Zambia rising 9.4%, followed by Ghana +3.9%. BRVM (regional exchange for Senegal, Ivory Coast etc.) was the worst performer (-2.9%) followed by Rwanda -1.3%. (All changes in SEK)

Most important event in April was without a doubt the introduction of the “Investors’ & Exporters’ FX window” by the Central bank in Nigeria on April 24th. Exporters and importers, portfolio investors among others are supposed to be able to agree on a price in that window, a market price. CBN will intervene if they deem it necessary. The currency immediately fell to NGN 375 per USD compared to the official rate of NGN 315, but the first week of trading was very limited according to market reports. We have as a consequence valued our holdings according to the reported rate from this window from May 5th and onwards. The fund hence took a big hit declining 8.4% on May 5th.

We see a liberalization of the foreign exchange market as a necessity for foreign portfolio investors to regain interest in Nigeria, but also appreciate the fact that it will take time to restore investors’ confidence. This further strengthens the case for the relaunch of Tundra Nigeria & Sub-Sahara Fund as Tundra Frontier Africa on May 29th.

President Buhari seeks approval from the Senate to borrow USD 6bn from China for railway investments. The loan was announced at Buhari’s visit to China a year ago. Inflation in Nigeria continues to moderate, down to 17.3% in March from 17.8% in February. Inflation pressure is decreasing in Ghana as well with CPI rising 12.5% in March vs 13.2% in February. The March reading is the lowest number since September 2013. Kenya is however battling the effects of the drought and now also an invasion of armyworms affecting the crops. Inflation in Kenya rose to 11.3% in April from 10.3 in March.


The fund rose 2% in April, slightly underperforming its benchmark which rose 2.2%. On a country level the fund gained most in South Africa (through telecom operator MTN, whose biggest revenue contributor is the Nigerian business), while the underweight in Mauritius contributed most on the negative side. On a sector level, we gained relative to the benchmark from good stock picking within Telecom and Financials, while our overweight in the energy stocks hurt the most. During the month, we have increased the position in MTN, among other names. (All changes in SEK)

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