IIMA Empty text
Empty tex
DECEMBER 2019 ISSUE 5
BW LOCAL INVESTMENT ECOSYSTEM
Empty
Page of Contents Introduction
2
Local Emerging Companies
3
Closing the Infrastructure Financing
Gap
6
Investment Brands and The Role of
Branding
10
Q&A with Diaspora Talent
13
End of Era:Passive Equity vs Active
17
How Technology is Changing the
Fund Industry?
20
ESG Insights
22
Regulation & Policy
24
Youth Climate Change Activists
26
Out & About
30
Outlook
31
L o c a l I n v es t m e n t M a r k e t
I n t r o d u c t i o n | Pa g e 2
Where are bankable deals?
Emerging Local Fund Managers
Over the past four months, LCM Capital Research & Analytics Unit has devoted time and effort to uncover and expose the untapped opportunities across different economic sectors. Our discovery did not leave a shadow of a doubt of how well endowed Botswana is with natural resources, human capital talent and the opportunity to carve her own path and be a front runner regionally in infant industries that are overly dependent on imports.
Under the mentorship and guidance of the largest pension fund in Botswana valued at P66 Billion, the local landscape is gradually warming up to the emergence of local Fund Managers in a territory that has been dominated by foreign players in the past. The incubation programme which launched in 2017, saw two fund managers being brought under the fund manager development programme to grow local expertise and skills as part of the Citizen Economic Empowerment initiative.Â
Despite our resounding discoveries that we are always excited to share with our audience on a monthly basis, there is still lack of deal flow hitting the headlines on our local newspapers or social media. As avid consumers of local content whether on print or social media there is no coverage of deal closure or bankable deals on the pipeline. It could be a matter of not counting your chickens before they hatch or keeping your cards close to your chest strategy that is being adopted by most Fund Managers to be ahead of the game or there are just no bankable deals. However, our research findings are contrary to the no bankable deals sentiment but rather a matter of time before we discover the many deals in the pipeline across different players in the private equity and development finance space.
Some Fund Managers not brought in under the programme also managed to find alternative routes to build their brands and gain expertise in order to contribute to the growing Asset Management and Private Equity Industry. As we close 2019 it is important to look back at the development journey of these emerging local companies since 2017, highlight the wonderful contribution in the development of citizen owned fund management companies, the importance of skills transfer to the young finance professionals by the experienced Founders of these companies and their passion to see more managers coming on board. Our first article will take our readers on a journey as we profile these local pioneers that have decided to step up and develop the local fund industry and we will also cover the development and challenges in the industry for subsequent articles.
E m e r g i n g L o c a l C o m p a n i es | Pa g e 3
T o p 5 H o m e g r o w n I n v es t m e n t C o m p a n i es
x
1 Lindiwe Mafavuneh Founder & CEO
2
LCM Capital LCM Capital is an emerging alternative investment company run and owned by one of the few finance leading and influential female Founders in Botswana. With 13+ years international experience gained from Fortune 500 Companies in the USA and Ireland, primarily in hedge funds, the visionary Founder Ms Lindiwe Mafavuneh has managed to build a recognizable brand organically on a shoe string budget, influenced policy and reform changes for under invested economic sectors; Agriculture, Water and Sanitation, Renewable Energy and Healthcare through LCM Capital Research & Analytics Unit, whose monthly Impact Investing eMagazine was launched in August 2019 covering key topical issues. The Company was incorporated on 8 February 2017 and has since participated in regional and local influential conferences in the finance industry. LCM Capital provides Asset Management, Private Equity,Research and Analytics and Startup Advisory services and solutions to companies. As a homegrown business with an international outlook on the fund administration landscape, our mandate is to ensure that funds are managed appropriately with an outcome of risk adjusted returns, profitability and capital preservation.
Bame Pule Founder & CEO Africa Lighthouse Capital Africa Lighthouse Capital entered the Botswana market in 2017 through the Botswana Public Officers Pension Fund incubation programme and is gradually making a name for itself in the local market. The Pan-African private equity investor Founder Mr Bame Pule with 6 private equity investments completed since 2002 has experience in valueadding private equity investing at Actis (Africa) and ShoreView Capital (United States) and investment banking (corporate advisory services) experience specializing in financial institutions at Goldman Sachs (United States). Sector specialties: consumer, industrial, healthcare, and business services. Key countries: South Africa, Nigeria, Botswana, Egypt, and Kenya. At March 4th Investments, partnering with African and global institutional investors in making private equity investments in Africa. Equity requirements typically $10m to $40m but often larger. Specialties: Develop investment theses, deal sourcing, transaction execution and negotiation, post-investment strategy & operations, managing multiple stakeholders, financing structuring, complex valuation and financial analysis, relationship-building, conducting due diligence, sitting on boards of directors, assisting management in implementing value-enhancing initiatives.
E m e r g i n g L o c a l C o m p a n i es | Pa g e 4
H o m e g r o w n I n v es t m e n t C o m p a n i es
3
Bafana Molomo: Co-founder and Managing Partner Aleyo Capital Aleyo Capital is a 100% Botswana owned investment management firm specialising in private equity and mezzanine investments in Southern Africa. It was founded in 2017 under the mentorship of BPOPF incubation programme. Mr. Bafana Molomo is Co-founder and Managing Partner at Aleyo Capital, a Botswanabased private equity fund manager. He was previously the Chief Investment Officer at the Botswana Development Corporation (BDC) having joined from Vantage Capital – a leading mezzanine fund manager based in Johannesburg and operating across Sub-Saharan Africa. At Vantage Capital, Mr. Molomo was a Senior Associate originating and structuring deals in South Africa, Botswana, Namibia and Mozambique. Prior to that he was with Venture Partners Botswana as a senior investment professional in their private equity team in Botswana and Namibia.
4
Kagiso Sedimo: Co-founding Partner Morula Capital Partners Morula’s mission is to help its clients achieve and exceed their investment goals without taking undue risk. Our business is focused on a global investment capability across asset classes.We are an owner managed investment manager based in Gaborone. We have a long-term valuation driven investment philosophy, aiming to indentify securities selling at a bargain. Kagiso is one of the four founding partners at Morula Capital Partners and the Portfolio Manager for Global Equities. Kagiso has over 12 years’ experience in asset management. Previously, Kagiso was a Portfolio Manager at Investec Asset Management where he was responsible for the management of all Botswana equity and multi-asset portfolios. Prior to joining Investec, Kagiso was a portfolio manager at Fleming Asset Management where he managed Botswana Equities. He also managed the Fleming Africa Fund from inception that focused on the frontier and emerging markets of Africa.
H o m e g r o w n I n v es t m e n t C o m p a n i es
5
E m e r g i n g L o c a l C o m p a n i es | Pa g e 5
 Taolo Modisi: Founder & CEO Alpha Reign
Alpha Reign is a private investment firm and specialized investment bank that provides financial advisory services across a range of sectors, including finance, consumer goods, manufacturing, agriculture, health care, financial intermediation and infrastructure. We facilitate the supply and demand for capital across Africa. Alpha Reign provides a global network and a highly experienced team versed in all aspects of investment banking, banking, debt capital markets, private equity, and venture capital. We are passionate about the development of the capital markets in Africa. Â Seasoned Senior Executive and Investor with significant Investment Banking and sub-Saharan African Treasury experience, having placed issues for various Sovereigns, Multinationals, State Owned Entities, Banks, and Corporates. Lived in six countries & originated a number firsts including the first commodity linked note in Southern Africa, and the first issues for government, corporate & commercial paper in a number of different countries in sub-Sahara Africa.Passionate about the development of the capital markets in Africa and have an avid interest in frontier and emerging markets. Have received prestigious awards from The Banker & EMEA Finance Magazine.Spoken at various international conferences discussing capital markets development, investment & funding in sub-Saharan Africa.Shareholder in a family-run business with interests in property, property development, tourism and education having employed over 1000 people in Botswana.
L o c a l C a p i ta l M a r k e ts The most anticipated State of the Nation Address (SONA) in 2019 was delivered by the President of the Republic of Botswana to an eager and hopeful Botswana citizens and residents on 18 November 2019. The SONA was jam packed with new opportunities that will see a divergence from old industries to the birth of new industries through a private sector led growth under the cluster development programme. The cluster led programme three key pillars are; business productivity value chains competitiveness The business community with keen interest in untapped opportunities primarily in Agriculture, Healthcare, Water & Sanitation and Renewable Energy were enthusiastic about the policy developments in these sectors, the commitment from the policymakers to implementing and executing strategies that will drive performance, productivity and efficiency in the new emerging sectors. There has been a renewed hope and assurance to investors that are keen to invest locally and attract strategic partners from other countries. AGRICULTURE Agriculture was the new comeback kid in 2019 as a rebranding strategy was implemented to attract young commercially minded farmers into the sector. Agriculture contributes less than 5% to the Gross Domestic Product (GDP)with youth participation in commercial livestock production currently at less than 4%. Youth participation in commercial livestock production is significantly low. The Ministry of Agriculture and Food Security has a youthful Minister DR Dikoloti who will drive the aggressive marketing and positioning of the sector to attract the youth and reduce the double digit unemployment rate.
4%
C l o s i n g t h e I n f ra s t ru c t u r e G a p | Pa g e 6 The special economic zone for agriculture in the northern part of the country, Pandamatenga is now the hub for processing and manufacturing of agriculture products. It was announced through SONA that more land has been earmarked to house twelve silos each totaling 5,000 metric tonnes steel grain storage facility. This presents opportunity for the old and young farmers to step up into the agro-processing industry within the vicinity. The most significant impediments in the agri-business sector has been access to affordable capital, land and climate change. To address climate change the government has rolled out the Climate Smart Agriculture (CSA) programme which is being implemented in order to increase resilient production systems and improve the livelihoods of those dependent on agriculture. The deployment of technology will definitely de-risk this sector and drive down the cost of capital that has been a huge factor in driving interest away from the sector. From a large scale perspective more infrastructural developments will be needed for value addition. These infrastructural developments come with a huge price ticket that can be realized through the assistance of institutional investors, development finance institutions and private investors. Pension Funds have been dying for more bankable investments locally to diversify the risk of the local equity market, therefore the development in the agriculture in terms of policy enactments and reforms, the use of hybrid systems should entice institutional investors to close the infrastructure finance gap in agriculture. It is estimated that the food import bill in 2018 was P7.745 billion, which is very high and also demonstrates the opportunities that are available to wean the country from imports and improve food security. 2018 Food Import Bill
P7.7B
C l o s i n g t h e I n f ra s t ru c t u r e G a p | Pa g e 7
L o c a l C a p i ta l M a r k e ts
Mobilizing Local Funding Resources for Agriculture
Institutional Investors
Local Fund Managers
Private Wealth Individuals/Families
Local Capital Market
Development Finance Institutions
"The green revolution taking the Botswana agriculture sector by storm will drive internal mobilization of local funding resources to invest in agro-processing infrastructure and various projects across the agriculture value chain. We predict more locally made products will be launched in the next 5 years." Lindiwe Mafavuneh-Founder & CEO of LCM Capital
L o c a l C a p i ta l M a r k e ts HEALTHCARE As highlighted in our previous issue on healthcare, we expect to see more local or foreign direct investment on this under-invested sector. The President reiterated the government commitment and priority to the provision of quality healthcare and universal health coverage. The local healthcare system will undergo e-Health makeover in the next five years as it catches up with other government organizations or institutions that have already embraced the internet of things to give end users the most efficient and quality experience. According to SONA P261,000,000 was spent on the maintenance of buildings and replacement of key equipment and plants. There is yet to be an initial public offering for a pharmaceutical or healthcare company on the local bourse. Healthcare equities remain the most sort after asset class that yield attractive alpha for shareholders. We expect to see Local Private Equity Managers investing heavily in this sector to grow and develop the industry to catch up with the rest of the world. According to Deloitte and Touche Global Healthcare Report, global healthcare expenditures are expected to continue to rise as spending is projected to increase at an annual rate of 5.4% between 2017-2022, from USD$7.724 trillion to USD$10.059 trillion (2019). Health technology sector is expected to reach US$280 billion by 2021, at a CAGR of 15.9% between 2016–2021. Source: Deloitte 2019 Global Health Care Sector Report
C l o s i n g t h e I n f ras t ru c tu r e Ga p | Pa g e 8
WATER & SANITATION Climate change has exacerbated the water scarcity crisis in most drought prone countries. The perennial low rainfall experienced throughout the year had devastating consequences on water intensive industries like agriculture. With groundwater representing 60% of water sources for water consumption, the government is feeling the pressure to augment supply through alternatives sources of water. The 2019 SONA highlighted the need to consider recycling of waste water to potable water. In our previous IIMA Water publication we highlighted the massive opportunities of the Glen Valley Wastewater Treatment Plant as a means to close the water gap in the greater Gaborone area. According to SONA the project will bring back the Glen Valley Wastewater Treatment Plant to a treatment capacity of ninety million litres per day (90Ml/day) with completion date April 2020. The Glen Valley Water Reclamation is at feasibility stage. The project is intended to reclaim sixty (60) million litres a day to augment water supply in the greater Gaborone area.. Another exciting project that should see the light of day once approved by parliament is the construction of the one hundred kilometres (100km) pipeline from Masama Well fields to Mmamashia, which is meant to increase water supply to the Southern part of Botswana by sixty four million litres per day (64Ml/day). We expect to see more Private Public Partnerships (PPPs) between government and the private sector for these mega projects in the 2020.
L o c a l C a p i ta l M a r k e ts
RENEWABLE ENERGY Energy players have been eagerly anticipating changes and major strides in the renewable energy space for a long time. SONA gave some level of assurance and confidence that a solar energy programme is underway and will be unveiled in the next financial year. Climate change policy has been developed and will be tabled in the next parliament debate and the National Energy policy will also undergo review during the year. The progress in policy development and reviews is a welcome change as Botswana scored 57.7 points out of 100 points and ranked 96 out of 128 countries in the World Economic Forum trilemma score that looks at energy security, energy equity and environmental sustainability. a Source: Visual Capitalist
C l o s i n g t h e I n f ras t ru c tu r e Ga p | Pa g e 9
The new administration executive team seems to be passionate about green energy as we have seen the 1st exhibition of the solar powered car by Botswana International University of Science and Technology Engineering Students as well as many exciting research and development projects in the green technology. CONCLUSION SONA provided insights on the direction of the economy and priority projects of the new administration. Impact focused private equity investors should be thrilled to see focus given to Agriculture, Healthcare, Water & Sanitation and Renewable Energy. We believe internal mobilization of funding resources will be considered to accelerate infrastructural development in these key sectors. Most importantly that there will be more collaboration and strategic partnerships to efficiently execute the aforementioned projects in a cost effective manner.
I n v es t m e n t B ra n d s a n d T h e R o l e o f B ra n d i n g
E d i t o r i a l | Pa g e 1 0
Thato Angela Chuma
Founder & Partner The Local Slice Botswana & South Africa We find ourselves living in an ‘attention economy’ more than before due to the exponential growth of digital avenues as well as dynamic market trends, and this has affected how we view brands and how brands view themselves. Branding has become more than just a company’s logo, its values and mission. It has evolved into the way a company treats customers, the quality of its offerings and how the brand builds an organic relationship with its target market. In today’s market, branding is synonymous to value. How brands keep up with being dynamic, appealing and relevant to the needs of the market is how they set themselves apart and stay ahead of the curve and competitors. In the context of Botswana and an infant investment ecosystem, branding is still largely traditional, reactionary, and acclimatised by a gradual move to online avenues. CREATING BRAND PRESENCE When it comes to brand presence, positioning is key. For your brand to stand out, it must have various strategies in place that communicate its value. In a highly competitive investment management market that is occupied mainly by foreign entities, emerging indigenous companies in this field have a great opportunity to differentiate their offering. This must be highlighted through cementing trust and a brand promise that is accessible, relevant to the locals and transparent.
Brand values must be aligned to making a difference, uplifting communities, affordability and prosperity. Consumer preference is indicative of such values being what customers find appealing as well as how the brand taps into local insights and influences.With the advantage of free online avenues, emerging brands can also use these platforms to build a relationship with stakeholders through conversations that drive engagement and feedback around their service offerings in a manner that is understandable to the market.
E d i t o r i a l | Pa g e 1 1
I n v es t m e n t B ra n d s a n d T h e R o l e o f B ra n d i n g
REPUTATION MANAGEMENT Reputation is everything in the investment market. If stakeholders cannot trust your brand, it will be difficult to retain and recruit new customers. Reputation management mainly comprises of maintaining the brand’s credibility and ensuring that consumers regard the brand as ethical and responsible. With the local investment market marred with issues of lack of transparency, lack of promptness and feedback, it is imperative that emerging investment businesses make it their priority to communicate proactively with their stakeholders, not only when there is a crisis. Updating clients on the company’s progress, plans, successes and windfalls should be part of key strategies that drive the efforts of the business. Tactics such as press conferences, press releases, opinion pieces must become primal in the business strategy.
STAKEHOLDER ENGAGEMENT Today’s customer wants to feel valued, seen and heard. This is why stakeholder engagements that are inclusive and focused on the consumer’s interests are preferable to those who don’t make the consumer have a sense of being ‘part of the brand family’. Hosting meet and greets is important for clients to interact with those who handle their monies and it builds loyalty and an organic client-consumer relationship. Workshops and conferences that address clientele issues and product offerings they might not understand are also vital for a brand to know how to design and position offerings. Prompt responses to inquiries and great service delivery strengthen stakeholder relationships with a brand as well. Engagements must be proactive, interactive and inclusive.
I n v es t m e n t B ra n d s a n d T h e R o l e o f B ra n d i n g
E d i t o r i a l | Pa g e 1 2
DIGITAL PRESENCE With the migration from traditional to digital avenues taking hold, brands definitely need to have online presence. It is estimated that 9 out of 10 people who have smartphones check their phones every hour. This indicates that to enhance your visibility as a brand, you must have online engagement. Navigating online avenues means a brand must have a content plan on how they reach their client base. They must have a framework for online content (from blog posts to tweets, from online reviews to Facebook updates) that communicates its values, offerings, and latest developments. Branding is the springboard that can propel the business forward, and give it a competitive edge. When successfully implemented, a well-defined and strong brand can give the business a strategic
Thato Angela Chuma has a BBA in Marketing
position in the market, and eventually drive sales, create brand
from the University of Botswana. She is a Brand
value, makes the enterprise stand out from the competition and
Strategist, PR and Communications Expert,Writer,
most of all, act as a catalyst for business growth.
Poet and Vocal Artist and Song Writer.
Q & A w i t h D i a s p o ra Ta l e n t
I n t e r v i ew | Pa g e 1 3
Godiraone George Synthetic Products and Global Securities Analyst & BSc (Hons) Mathematics with Finance Student. UK Based Botswana Talent
Q: You were part of the guests that attended the 2017 Banking, Insurance and Finance Expo that was sponsored by LCM Capital which highlighted the emerging trends in fintech and their application to the local ecosystem. Can you explain if you have seen any developments since? GG:This was a great event for those interested in the disruptions brought by fintech to the traditional banking/finance space. We had talks from Dr. Coetzee who spoke on the changing face of banking relationships in terms of the easy access to banking services through use of modern technology such as the internet and also mobile apps. Fintech still remains a grey area in Botswana and I personally believe it has capacity to develop into a sustainable market. Look at the number of people using services like MyZaka and Orange Money, the numbers are there and shows you there is potential. I have heard so many people complaining about the bank charges they face even for checking their account balances or cash withdrawals, these can be areas that can be used as leverage for the fintech companies to gain customers. But it is rather easier said than done, you’d have to overcome the strict financial regulations put in place as well as the internet issue in terms of both access and affordability. An interesting fact given at that time by Mr Edwin Afithile was that only 16% of people in Botswana have health insurance cover, this is rather unsurprising given that we have been afforded access to free health cover by our government. You also have Botswana Life controlling over 70% of this market which means it is effectively a price maker on it’s own, it’s able to charge higher premiums not affordable to many given the income inequality/low wages our country has. One recent development I have seen is a local company by the name Vimosure which is an insurtech company focused on developing on-demand risk intelligence services to make sure it provides affordable health cover. The company is gradually expanding and has got presence in countries like Nigeria. It is making the use of partnerships and unity of which I believe are some of the key characteristics needed to develop any industry.
Q & A w i t h D i a s p o ra Ta l e n t
I n t e r v i ew | Pa g e 1 4
Q: At the time when you spoke to our founder you were embarking on a journey to study in the United Kingdom, can you update us on your progress and what has been the greatest milestones in your international experience? GG: I am current student at The University of Manchester, I study BSc (Hons) Mathematics with Finance. I have always had a passion for Finance from a young-age, I was a fan of the late former Minister of Finance Mr Baledzi Gaolathe even though I hardly had any understanding of economics/finance back then. Throughout the years I have excelled in business subjects and also attended various finance workshops around Botswana as way to get insights around the industry such as Stanbic Bank Botswana Careers Roundtable and The Banking, Insurance and Finance expo where I met the founder and CEO of LCM Capital Mrs Lindiwe Mafavuneh. The quantitative nature of my degree has helped develop my analytical skills, logical thinking as well as my commercial awareness. The competitive and highly advanced level of entrepreneurship here is unparalleled in every sector you can think of. In my spare time I am engaged with the Manchester Entrepreneurs society which is a student focused scheme which has various programmes aimed at developing the next generation of entrepreneurs through provision of free funding, connecting students to the ecosystem of entrepreneurs, investors, mentors through a series of networking events and workshops. They also have a Google Garage project aimed at developing programming skills to the general public and assisting with web related services for start-ups. One of the highlights I can point out is I have worked with the Global Entrepreneurship Network team Botswana headed Mr Mooketsi Tekere along with the Manchester Entrepreneurs team to try build a platform that will allow exchange of ideas, skills and networks on by entrepreneurs on both sides of the world. This would foster access to new markets for both parties and building up of long-term relationships. Q: Can you give us a high level overview of your role as a Synthetic Products and Global Securities Analyst? GG: I joined at a time of integration of the Synthetic Products Group and Global Securities Services into one team. Essentially the team’s main clients are hedge funds and we provide them with services to manage risk, monitor their portfolios maintain liquidity and also expand their businesses. The Synthetic Products team mainly deals with derivative trading like swaps, futures, put/call combo to provide exposure to certain equity names without the need to buy the physical shares. One of my daily roles is looking after the EMEA ETF execution, Client Sector and Basket/Indices combo daily profit and loss on trades. As an analyst I have to provide checks on the numbers reported are accurate, establish and explain any variances and also seek to understand the drivers of the numbers. I also do a monthly verification of all held position by the team to make sure we are marking in line to external parties like Bloomberg as mispricing presents risk and also the downside of short positions is unlimited. The Global Securities team is the physical opposite to the Synthetic products providing a hedge against any future losses. Some of the mandates includes security lending to cover customer shorts of which one of the books I look after is the daily fees for exclusive rights to certain names. The team also provides derivatives clearing services, interest on balances services as well as cash loans to Prime Brokage Clients of which many are collaterized by the physical stock. It has been a steep learning curve but the amount of support I have received from my first day is remarkable. The team I work with is diverse and has got people who have solid experience in the financial sector who always push me to take opportunities as well as doing my level best on any given tasks.
Q & A w i t h D i a s p o ra Ta l e n t
I n t e r v i ew | Pa g e 1 5
Q: Botswana market does not have exotic products yet or talent that has been exposed to advanced markets like yourself. How do you intend to raise awareness of these sophisticated products that can diversify our product offering which is predominately equities and fixed income? GG: I have not yet worked in any financial institution in Botswana yet so I am not really familiar with the kind of products they offer. I am on a one-year contract with Goldman Sachs, and I will be in Botswana for four months next year from June to September. I am hoping to use that time to find an internship in a financial institution to see what products they offer, how I can share the knowledge I have and at the same time learning more before heading back to university for my final year. I am truly learning a lot and in the short space of time at Goldman Sachs I have already drawn inspiration to look into derivative pricing/modelling for my final year project. For me at the moment it’s one step at a time but I am sure one day I will be well equipped to pass on my knowledge to the next generation whether it’s in Botswana or elsewhere. Q: From your side of the world in London, Brexit is a never-ending saga, however can you explain how will it affect emerging markets like Botswana? GG:I think right now the two most talked economic issues is Brexit and the US-China trade war. Week in, week out we see markets moving to announcements around these two. There is so much uncertainty around these and it’s often hard to predict what is going to happen. For Brexit, countries like Botswana can step in and negotiate better trade deals with the UK, this can be across multiple sectors like agriculture and mining which we have competitive advantage. We have seen a decline in the manufacturing space as companies halt project in order to see how Brexit unveils overtime, although a long short Botswana manufacturing companies can establish partnerships and push for making us a powerhouse in manufacturing given it’s still a developing sector. We also have one a low minimum wage of which I believe can be used to attract foreign direct investment. For institutional investors this might be a good time to invest in UK companies as we have seen most of them see their share prices fall down, so it’s cheaper now before the projected bounce back in 2020 of the UK. We should also aim at developing our agricultural produce, one thing of note is how the US and China agreements of purchasing agricultural produce can be worth billions of dollars, surely we can try to get a share piece of the pie provided we produce quality foods and also have people who have the nation at heart making bi-lateral trade agreements. Given the much scrutiny around data handling and privacy around the world and continued increase of tax charges on tech companies, as part of the 4th industrial revolution Botswana should aim to take a leading role and find ways to attract companies to establish shops there by creating business friendly laws and providing a conducive environment.
Q & A w i t h D i a s p o ra Ta l e n t
I n t e r v i ew | Pa g e 1 6
Q: Finally, you have managed to beat youth unemployment by accessing international markets to not only gain skills but to have exposure to different financial products and diverse workforce. What advice can you give to newly graduates or the youth that are still waiting for job creation in terms of shifting their minds to look for opportunities abroad? GG:I am always grateful for the opportunities that have come my way and always giving my all to succeed. We often say people have different paths in life, but one thing is for sure sometimes you just have to push yourself and get out of the comfort zone. Job hunting can be a daunting experience but if the local market is not accommodating then try to connect with people abroad to seek for new opportunities. Use tools like LinkedIn and Twitter to share your story, you’d be amazed by the number if people out-there willing to help. Also, entrepreneurship is also an option, it does not always to be big company from the onset, think outside the box but make sure the product/service you provide has got a market.
I n t e r n a t i o n a l C a p i ta l M a r k e ts
E n d o f E r a : P a ss i v e E q u i t y F u n d s v s A c t i v e | P a g e 1 7
This was written by John Gittelsohn. It first appeared on the Bloomberg Terminal. It’s official: inexpensive index funds and ETFs have finally eclipsed old-fashioned stock pickers. Passive investing styles have been gaining ground on actively managed funds for decades. But in August the investment industry reached one of the biggest milestones in its modern history, as assets in U.S. indexbased equity mutual funds and ETFs topped those in active stock funds for the first time. Stock picking isn’t dead. But the development marks the official end of money managers’ position as the guiding force in the American stock market – and the seemingly inexorable rise of low-cost index-driven investing. If, as expected, the shift keeps gathering momentum, the implications will be enormous for the industry pros, financial markets and ordinary investors everywhere .Even one-time star managers like Peter Lynch, who in his heyday turned the Fidelity Magellan fund into a giant through his stock-picking prowess, concedes there’s no turning back.
No Second-Guessing “We have so many funds beat the market 10 years, 20 years, but we’re not going to second-guess the customer,” Lynch, Fidelity’s vice chairman, said in an interview. “We’re not going to say, ‘You fool! You idiot!’ If you want to buy an index fund, here it is.” And buy they have. August fund flows helped lift assets in index-tracking U.S. equity funds to $4.271 trillion, compared with $4.246 trillion run by stock-pickers, according to estimates from Morningstar Inc. Investors added $88.9 billion to passive U.S. stock funds while pulling $124.1 billion from active this year through August, the firm estimated. The unraveling for stock pickers accelerated after the financial crisis, when investors burned by the markets flocked to low-cost passive funds. The unraveling for stock pickers accelerated after the financial crisis, when investors burned by the markets flocked to low-cost passive funds.
I n t e r n a t i o n a l C a p i ta l M a r k e ts
Passive funds came onto the scene in the 1970s and took hold with the advent of ETFs in the ‘90s. Their popularity soared with the bull market that began in 2009, as cost-conscious investors rode benchmark indexes and most managers lagged.Driving the migration is cheaper fees. Passive U.S. equity funds cost an average of about 10 cents a year per $100 of assets, compared with 70 cents for active funds.“That represents investors keeping more of their own money,” said Eric Balchunas, a Bloomberg Intelligence analyst. “If there’s a loser in this, it’s probably the asset-management industry. The rise of passive represents the rise of very low fee products and ultimately that’s going to mean some pain for them.”
Race for revenue As fees compress, firms are casting wider nets for revenue. Vanguard Group, the $5.6 trillion giant that started the revolution with its S&P 500 Index mutual fund, is pushing harder into the personal advice business. BlackRock Inc. is looking overseas for growth.
E n d o f E r a : P a ss i v e E q u i t y F u n d s v s A c t i v e | P a g e 1 8
Fidelity has turned to securities lending and is trying to build market share by offering zero-fee funds. Flows at Boston-based Fidelity, which lost its position to Vanguard as the largest U.S. mutual fund manager in 2010, show how strongly tastes have changed. While many of its biggest active products, such as the $118 billion Contrafund, racked up better returns, customers pulled $20 billion from its traditional equity fund lineup in the first half of 2019 and poured $52 billion into its passive offerings, Morningstar estimates.“They’re far more tolerant of passive products, partly because of how they’re investing,” Kevin McDevitt, the Morningstar senior analyst who assembles the fund flows report, said in an interview. “It’s kind of a set it and forget it kind of thing.”Financial advisers are helping to fuel the move. They can build client portfolios from an array of index offerings. That approach caps potential gains, as index funds won’t top any year’s performance charts. It also limits manager risk – the chance that a star will suddenly stumble.
I n t e r n a t i o n a l C a p i ta l M a r k e ts
E n d o f E r a : P a ss i v e E q u i t y F u n d s v s A c t i v e | P a g e 1 9
The passive wave is forcing firms to cut the fees they charge in order to stay competitive. Meanwhile, their expenses for technology, talent and regulatory compliance are rising, further squeezing profit margins.Some active managers have suffered relentless outflows as higher operating costs hurt relative performance, and their own stocks have suffered. Bloomberg’s index of large asset managers fell 34% in the five years through 30 August, even as the S&P 500 rose 46%.
More deals? Pressure on the industry is spurring speculation of more consolidation. PwC forecasts a 14% decline in the number of funds and a 22% drop in expense ratios by 2025. Michael Burry, hero of Michael Lewis’s book “The Big Short", warned last week that passive fund inflows are inflating a new stock and bond bubble that is bound to blow up as money linked to fund indexes exceeds amounts traded in individual stocks. “The theater keeps getting more crowded, but the exit door is the same as it always was,” Burry wrote in an email exchange with Bloomberg.
"All this gets worse as you get into even less liquid equity and bond markets globally.” To be sure, U.S. stocks held in passive and active funds combined represent less than onethird of the total market, with the balance owned by individuals, pensions, insurers and other investors, according to the Investment Company Institute. And active managers remain confident. Capital Group, founded in 1931, has resisted indexing. The closely held, Los Angeles-based firm says its long-term returns mostly beat passive products, whose lack of agility would be exposed in a bear market. The firm’s $190 billion Growth Fund of America, managed by a 13-person team, returned an annualized 8.1% in the 20 years through August, versus 6.3% for the Vanguard 500 Index Fund. “Many investors believe they are making the ‘safe’ choice in picking an index fund,” said Steve Deschenes, Capital Group research and development director. “The most popular index funds expose customers to the full brunt of downturns. Strong active managers can provide less volatility and a smoother ride.”
Technology
H o w T e c h n o l o g y i s C ha n g i n g t h e F u n d I n d u s t r y | Pa g e 2 0
As Botswana transition to a knowledge based economy more focus, commitment and resources will be towards research and analytics to mine data that can provide a competitive edge for businesses and strategically position them on the international stage. Early this year at the World Economic Forum 2019 in Davos, where the Botswana Presidential delegate was in attendance for the first time, the 4th industrial revolution (4IR) was the main theme, with data declared "the new oil". What does that mean for a country that is yet to capitalize on information and technology to leapfrog ahead of it's peers? To many, scrubing through data is a mundane task that should only be done by those at the lower end of the food chain not the top executive level. However, as the investment ecosystem welcomes new players in the industry, the landscape will become more competitive which will require innovative skills and thinking outside the box to stay ahead of the pack. The old ways of beating competition through theatrics will become obsolete and the winners will be those that create value for clients through the infusion of human intelligence and artificial intelligence to enable them to analyze alternative data sets for that extra nudge against competitors.
The 4IR is no longer an idea that is so far from reality and in the distant future. There are multinational companies that have been incorporating artificial intelligence and its many facets in their research, risk management and credit management since the early 2000s. According to the research conducted by the CFA Institute, Adoption of Artificial Intelligence and Big Data Applications in Investment Management Report, most portfolio managers continue to rely on excel and desktop market data tools, only 10% of portfolio manager respondent have used AI/ML techniques in the past 12 months. OVER THE PAST YEAR,
10%
of Portfolio Managers used AI/ML Techniques
H o w T e c h n o l o g y i s C ha n g i n g t h e F u n d I n d u s t r y | Pa g e 2 1
Technology
Botswana Investment Management landscape is lagging behind its peers in terms of using sophisticated technology in investment analysis and strategy. But new entrants in the market are using technology and big data as a differentiation strategy from early entrants. For those
wanting to adopt AI/ML
techniques, they will have to consider the below three types in investment management. Types of AI and Big Data Applications 1. Natural Language Processing (NLP)- This is the utilization of computer vision and voice recognition to efficiently process text, image and audio data. 2. Machine Learning (ML)- including deep learning techniques is used to improve the effectiveness of algorithms used in investment process. 3. Artificial Intelligence Techniques-Is used to process big data, including alternative and unstructured data for investment insights.
Early adopters of these technologies in Botswana Investment Management will be able to offer clients competitive costs and attractive alpha. In an environment at an infant stage in technological advancement there will be limitations to the adoption of AI/ML techniques. Paramount on the limitation list is the shortage of talent and skills in AI/ML. However, Botswana third level education continues to produce high calibre mining engineers from Botswana International University of Science and Technology (BIUST) who struggle to find employment in mining jobs after graduation. These mining graduates can be redeployed and up-skilled in Investment Management AI/ML programme. Other limitations that were stated on the CFA research paper are: Limitation 1. Cost 2. Talent 3. Technology 4. Leadership vision 5. Time
H o w t o i n t e g ra t e E S G d a ta
E S G I n s i g h ts | Pa g e 2 2
How to integrate ESG data into investment portfolios Bloomberg Professional Services Evolving Applications Much of what is considered environmental, social, and governance (ESG) data today has influenced portfolios for many years. Take governance, for example. At a recent Bloomberg Data Speaker series event, Marina Niessner, VP of AQR Capital Management, said AQR has used governance signals since the firm’s inception in 1998. “They weren’t connected to ESG back then, but thinking about companies having good governance and potentially better performance in the future is long grounded in academic research,” said Niessner. “We’ve had those signals that we’ve constructed from raw data — [essentially] a lot of high quality accounting data — and now we can call them ESG.” Denoting those signals as ESG is increasingly important as asset managers are under new pressures to embrace ESG in their investing strategies, and returns are not the only objective.
Demand for ESG is changing. Naturally, there has always been the interest in alpha. Now, it is also about awareness. “More recently, we’re seeing demand for the restricted stock lists that we’re getting, and also more of the value-based ethical investment [strategies] — where people are willing to trade off some alpha to build more ‘aware’ portfolios,” said Niessner. Effectively customizing investment strategies using ESG intelligence depends on the goal of the portfolio and types of decisions being made. At Warburg Pincus, which deals in private equity investment decisions, it is an investment evaluation criteria.“ During our due diligence process, we’ll take a look at ESG as a way to evaluate potential operational risks, reputational risks, or regulatory risks or red flags,” said Leela Ramnath, Director of ESG at Warburg Pincus.
H o w t o i n t e g ra t e E S G d a ta Firms also have to be prepared to report on ESG.“ In Europe and even in Hong Kong, there are some listing requirements around ESG. So there it’s an actual regulatory issue… and in the U.S. market, right now the implicit expectation is for public companies to report on these things,” said Ramnath of ESG’s other role. With the market for ESG investing growing worldwide — reaching $30 trillion in assets under management in 2018 — Ramnath noted that ESG is becoming an increasing consideration as private companies look to IPO. Part of the process To be effective, firms must weave ESG into their strategy and process, as opposed to just their sales pitch. “This ESG conversation is not about product development. It’s not a product to sell, it’s a part of an investment process,” said Brace Young, Partner at Arabesque. “You incorporate into your process either to get better returns or to align the stakeholders that you’re investing for to the things they care about. And there’s a spectrum,” said Young. “I think the big opportunity is to fulfill that customization and align the financial assets to the things that are important to the people that are giving you the money.” Seizing that opportunity requires firms to figure out what actually works. That starts with strong data practices; companies must utilize consistent, quality data from trusted service providers, and should develop ESG methodologies that align to portfolio goals. That often means looking for financial materiality. Depending on industry and geography, there are only certain types of ESG signals that actually influence stock prices and investors are interested in. Identifying what is most relevant requires extensive analysis inside specific verticals. The SASB materiality map provides a starting point for developing models for testing and iteration.
E S G I n s i g h ts | Pa g e 2 3
Foundation for insights Identifying relevant signals also requires an understanding of ESG’s gaps. Panelists at the Bloomberg event all noted that since all ESG data is self-reported, its “completeness” should never be assumed. Best practices are still being developed, but are growing alongside client demand. Joshua Livnat, Managing Director of QM, whose team recently published a paper on ESG in the Journal of Portfolio Management and launched a product that uses ESG in its portfolio theory, says that when his sales teams speak with customers and prospects, “they get a nice foot in the door by introducing this type of research. It’s hot. ”It will likely get hotter from here, as the influence of environmental and social factors expands. As consumers’ values evolve, developing an ESG strategy now will help firms earn better insights on how ESG influences their portfolios’ values over time. Robust data sources and management strategies lay the groundwork for understanding ESG influences. From that foundation, additive signals will follow.“Today there is unconditionally materiality,” said Brace Young of Arabesque of ESG at the event. “I think as data gets better, it will be more and more powerful to make individual stock decisions.”
NBFIRA
Source: NBFIRA
2019 was a challenging year for the Non-Bank Financial Institutions Regulatory Authority (NBFIRA) as it weathered headwinds locally and internationally in a dire attempt to move the country from being blacklisted due to lax compliance and risk management practices across different players in the finance industry. NBFIRA implemented an aggressive Anti-Money Laundering/Combating the Financing of Terrorism (AML/CFT) and Know Your Customer (KYC) campaign throughout the country in an effort to raise awareness of best international standards and practices and increase the rate of compliance in the pension fund and insurance industries. These new developments in more stringent rules and procedures in compliance resulted in the amendment of the Financial Intelligence Act, 2019 which provides more in-depth insights on the treatment and recognition of beneficial ownership, politically exposed individuals and highly influential individuals to mitigate the risks of money laundering. As NBFIRA continues to play the role of big brother in the pension fund industry, the important question is how can the regulator increase compliance?
R e gu l a t i o n & P o l i c y | Pa g e 2 4
Regulation-Technology ("RegTech") The answer lies in the convergence of regulation and technology to reduce the cost of compliance especially for startups and incumbents on legacy systems.The emergence of homegrown investment management companies as illustrated in the aforementioned article will require a new fresh approach to compliance and risk management. These new players in the industry are in a better position to adopt and implement technologies that will make it easier for them to conduct due diligence and risk based audits, AML and KYC on potential clients and existing clients. Technology is now becoming the backbone of every company in Botswana as faster and reliable optic fibre internet is rolled out across the capital city Gaborone with plans to expand across the country. The Regtech movement is not yet on our local shore as more focus has been on fintech developments and applications over the past 5 years. With more reporting and regulatory filings enforced and required that means more companies will feel the challenges and would seek solutions. Â
NBFIRA
The Regtech Universe Value Chain Source: Deloitte
According to Deloitte RegTech Universe article which delved into the entire value chain in the regulation space, there are currently 347 Regtechs majority in the United Kingdom and USA. This demonstrates the penetration and use cases of Regtech solutions in some parts of the world to ease regulatory challenges and mitigate risks. As at 31 March 2018, the non-bank financial institutions sector recorded a total of 775 active entities, reflecting a growth of 11% from 698 entities recorded in the previous year. The net increase in regulated entities was mainly due to the positive movement in all industries, with the Micro Lending industry dominating the sector with 324 players in 2018 from 311 players in 2017, followed by the Insurance industry recording 298 players in 2018 from 246 players in 2017, then Capital Markets industry with 64 players in 2018 from 53 in 2017 and, lastly, the Retirement Funds industry with 89 players in2018 from 88 in 2017(NBFIRA, 2018). The above statistics demonstrate the level of work that the Regulator is overwhelmed with and the importance of technology to alleviate the compliance burden from an oversight and preparers perspective.The message of the regulator is heard from all corners of the country through various platforms; social media and print to instill a culture of compliance and accountability for its members.
R e gu l a t i o n & P o l i c y | Pa g e 2 5
Active NBFIRA Members By Industry
Capital Markets
8.3%
Retirement Funds
11.5%
Insurance
38.5%
Non-Bank Lenders
41.8%
AML/CFT and KYC were foreign buzzwords at the beginning of 2019 but have gradually found their way to mainstream lingo as every transaction from opening a bank account to buying insurance products require compliance. The crucial step for the regulator will be to encourage the use of technology to reduce costs and noncompliance by active members. For entrepreneurs, this untapped territory presents opportunities to provide Regtech solutions to the 775 members. Lindiwe Mafavuneh Founder & CEO LCM Capital RISK|INVESTMENT|GOVERNANCE
C l i m a t e C ha n g e A c t i o n
Y o u t h C l i m a t e C ha n g e A c t i v i s ts | Pa g e 2 6
Enhancing Climate Awareness Amongst Young People: Lessons from China’s Rural Agricultural Sector During that action-packed week, we were given entrylevel exposure to the impact of climate change on crop By: Kudzani B. Koketso It is safe to say my climate advocacy journey began on 28 April 2014 with the words, "Congratulations! You have been selected to attend the ILIVE2LEAD International Youth Leadership Summit on the Environment in Ningxia, China from August 1-6, 2014!".... That wasn't even the best part. It read further, " You will now become part of an exceptional group of young people FROM AROUND THE WORLD who will meet and work together......" My first reaction was, "ME????" Exceptional group of young people from around the world??? That's when it dawned on me- I was being given a platform to reach for greatness outside of my comfort zone...to impact change...to view this world no longer as the big, wide world but as a global village, in which issues affecting one affect all! With this mindset, and this new well of hope, I boarded my flight to Johannesburg, then the 15hour flight to Beijing (I will never forget the heavily polluted Beijing air!), and then finally to the autonomous region of Ningxia.
yields and ground-level implementation of effective local strategies at alleviating the harsh climatic effects on the locals’ food security. Specifically, we were introduced to farmer’s attempts at hay planting as a crop alternative. Eye-opening! My professional experience has since enlightened me to the fact that climate change is a growing threat, posing serious challenges to global efforts to reduce poverty and hunger and the attainment of Global Agenda 2030. Agricultural production (necessary for food security) and land productivity are continuously threatened. Additionally, several environmental problems will continually plague nations due to the anticipated adverse impacts of climate change. In order to achieve and maintain food security, developing nations like Botswana will have to adopt sustainable land management practices which, if well implemented, will undoubtedly help the nation achieve sustainable levels of food production to feed its growing population. On a greater scale, such practices will enhance its climate change adaptation efforts.
C l i m a t e C ha n g e A c t i o n
Y o u t h C l i m a t e C ha n g e A c t i v i s ts | Pa g e 2 7
My time in Ningxia was a relatable experience like no other, given its temperature similarities to Botswana. The heatwaves were an unwelcome reminder of the reality I was returning to. Drought causes increased drying of the landscape as higher temperatures cause more moisture to evaporate from the soil, which in turn leads to even greater stress on natural and farmed vegetation. This is a major concern for institutional and individual stakeholders. Inevitably, climate change will alter local weather conditions (including rainfall and temperature) and lead to changes in the frequency and severity of climate hazards such as droughts. In his State of the Nation address (SONA) 2019, His Excellency the President of the Republic of Botswana announced that Government will now classify drought as a permanent budgetary feature rather than an emergency. This is a most welcome development. Society must adapt to the changes which will occur – either to avoid negative impacts or to take advantage of new opportunities. Enhanced efforts at adapting to the impacts of climate change is crucial to ensure that people’s livelihoods, public and private enterprises, assets, communities, infrastructure and the economy are resilient to the realities of a changing climate. This is a process and not a one-off activity. Climate change mandates ongoing activities by all relevant stakeholders to adjust their behaviour either in preparation for future impacts or in response to emerging events.
C l i m a t e C ha n g e A c t i o n
Y o u t h C l i m a t e C ha n g e A c t i v i s ts | Pa g e 2 8
The agriculture sector in Botswana is most vulnerable to climate change impacts due to unpredictability of rainfall. As one of Botswana’s key economic sectors which contributes to employment and poverty eradication, immediate interventions are required. It is also crucial to identify targeted initiatives aimed at reducing the vulnerabilities of key economic sectors to maintain the country on a positive development trajectory. In this respect the NDP 11 identifies sustainable natural resources management as an entry point for economic growth within which job creation and poverty eradication strategies will be anchored whilst recognizing the threats posed by climate change. Despite its upper-middle-income status, Botswana still battles with several socioeconomic issues which adversely impact the livelihoods of its communities, primarily the poor performance of the agriculture sector. Whilst acknowledging that progress has been made to reduce poverty over the past decade, high level of poverty still prevails amongst rural households which predominantly depends on agriculture. Persistent droughts over the past half-decade have left the country extremely vulnerable to climate change impacts, whilst compromising food security as well. In light of the above, one of its national priorities as espoused in its Climate Change Policy is to increase the country’s resilience to climate change impacts by promoting the adoption of conservation agriculture practices which will in turn improve food production patterns and enhance the resilience of local communities as well.
C l i m a t e C ha n g e A c t i o n
Y o u t h C l i m a t e C ha n g e A c t i v i s ts | Pa g e 2 9
Biography Kudzani is an aspiring public interest lawyer and international
development
practitioner
who
enjoys operating at the nexus of law and policy. She holds a Bachelor of Laws (LLB) from the University of Botswana and intends to pursue a Masters in Environmental Law in 2020. She is currently building her capacity as an international climate change negotiator under the United Nations Framework Convention on Climate Change (UNFCCC) and is currently a member of
Botswana's
Delegation
to
international
negotiation processes. In her spare time, she binges on interior design magazines and television shows.
 2 0 1 9 Af r i c a I n v es t m e n t F o ru m H i g h l i g h ts
$40.1 Billion deals secured under 72 hours, giving the AfDB President a reason to smile.
MOU ceremony signing between Afreximbank and Thelo DB for a railway development in Africa.
Investment in Sports in Africa is taking centre stage, as all eyes were on NBA Africa. Picture Source: @AIFMarketPlace
Ou t & Ab o u t | Pa g e 3 0
African Heads of State unpacking investments and opportunities available in their countries.
Tukombo Ishmael, Co-Founder of Private Equity Fund Aliethiea IDF closed over 70% of funds needed.
Another resounding success for AIF2019 with 2,221 delegates from 109 countries.
Ou t l o o k | Pa g e 3 1
Future Trends
Value Added by Kind of Economic Activity at Current Price (P'million) 6.1%
2.1% 16.2%
16.6% 5.7% 1.0%
Lindiwe Mafavuneh Founder & CEO LCM Capital Research & Analytics
7.4%
15.8%
Agric
6.7%
22.3%
962.1
Mining
7,247.8
Manufacturing
2,565.2
Water & Elec
Construction
3,320.2
Trade, Hotels & Rest
9,973.4
Transport & Comm
2,980.2
Finance & Business Service
7,099.2
General Gov't
7,458.3
Social & Personal Services
2,744.7
Source: Statistics Botswana
The economic diversification drive is starting to bear fruits as we now see key non-mining sectors surpassing mining in value addition to the gross domestic product (GDP). The GDP for the second quarter of 2019 was P49,241.7million compared to P48,850.2million registered during the previous quarter representing a quarterly increase of 0.8 percent in nominal terms between the two periods. The GDP Q2 2019 report released by Statistics Botswana show that non-mining sector overall contribution was 57.9% to the GDP in Q2 compared to mining which contributed only 16.2%. The main drivers to the non-mining sectors are Trade, Hotels and Restaurants, Finance and Business Service, Construction and Transport and Communications.
The statistics from this report are aligned with economic growth outlook of 4.4% in 2020 which will be spurred by a growth in nonmining sectors. The emergence of local fund managers will accelerate this growth by bridging the funding gap in non-mining sectors that are currently under-invested such as manufacturing and agriculture. For the year 2020 we predict that more bankable deals will come from the agriculture sector as more ground work has been laid out in land development and distribution, agroprocessing infrastructure projects to reduce the food import bill and increase youth job creation. Citizen economic empowerment initiatives will see more 100% citizen run businesses in the lucrative tourism sector that will promote budget travel.
461.5
2019 was a bull year for most of the listed banking and financial services companies which currently have a market value capitalization of US$3,528 Million on the Botswana Stock Exchange Limited. The top 5 list of companies with the highest market capitalization are dominated by the banking and financial services. Out of the 5 companies, 2 are in mining and 3 in banking and financial services. This demonstrates the role that the finance and business service play in driving economic growth from a public and private company perspective. The local investment industry is still evolving but in the next 5 years it will contribute significantly in the development of the economy and also in bridging the finance gaps left by traditional sources.
LCM CAPITALÂ RESEARCH & ANALYTICS
