African Safari--Bagging Big Game in Small Countries

When I was a young girl, I was enthralled by a book called “African Hunter.” The book was an autobiography of a white African hunter and it opened with him tracking down a rogue elephant that destroyed a small African village. As I recall, he felled the marauder with an elephant gun while the beast was charging him. Wow! Now here was a real Indiana Jones! I whisked through the book like that marauding elephant and was saddened when the last page was turned. Each chapter detailed an exciting adventure where the hunter risked life and limb in dangerous pursuit of big, exotic game. Not remembering who wrote it, I did an Amazon search and found that it fits the description of a book written by Baron Bror Von Blixen-Finecke in 1938. The Baron was a Swedish dude who married his Danish cousin, Karen. You might know her from her pen name of Isak Dinesen. Anyway, the baron moved to Kenya and ran a firm of safari guides, often being the guide himself. So cool was he that adventuress and author Beryl Markham wrote, “Bror was the toughest, most durable white hunter ever to snicker at the fanfare of safari or to shoot a charging buffalo between the eyes while debating whether his sundown drink would be gin or whiskey.” You gotta love the guy.

I hadn't thought of this book until recently when my friend Alice returned from a stock scouting trip to Ghana and the Cote d'Ivoire. The trip was organized by Securites Africa, an African trading and investment firm, and led by Larry Speidell of Frontier Markets Asset Management. Also on that trip was Ryan Shen-Hoover who has been investing in Africa for years and who puts out an excellent newsletter. (A free copy of his latest newsletter can be yours by signing up on his website: www.investinginafrica.net. )

Why am I even mentioning the notion of investing in these small, highly volatile African countries when my focus is on stock strategies? For two reasons. One is that because of the baron's exciting book, I'm especially curious to see if this continent is still as wild and woolly as I had pictured it; that is, do elephants still terrorize villages? And the other is more mundane: With all of this talk on emerging markets, is there gold to be mined in the African stock market?

This is a big subject and one that deserves more than a cursory glance. So I've decided to break it up over the next day or two and focus on different aspects of the African markets. Today I thought we'd address my curiousity: What is the “new” Africa all about? If you'll take a look at Shen-Hoover's excellently written and beautifully photographed trip account, you'll see that Africa isn't the grass-thatched huts inhabited by people with bones through their noses that I had imagined. Rather, it's become very modernized (at least the countries that he visited) with large thoroughfares and gleaming skyscrapers. That isn't to say that it's not without many problems that plague much of the sub-Saharan countries, such as coups, economic sanctions, massacres, assassinations, and war. But Shen-Hoover is guardedly optimistic. He believes that if it wasn't for the recent war in the Cote d'Ivoire, the country would be one of Africa's hottest economies, and if by some miracle the highly controversial upcoming presidential election were to go off without a hitch, the country would enjoy a tremendous rebound. As for Ghana, Shen-Hoover is much more optimistic, citing political stability, infrastructure investments, and high commodity prices as being good for the overall economy despite a rather laissez-faire management attitude on the part of a few of the companies he visited. My friend Alice believes that the biggest strength of these two countries lies in the optimism and resiliency of the people themselves.

So, put on your safari hat, grab your elephant gun and let Ryan Shen-Hoover be your guide on an entertaining, informative, and eye-opening African safari: http://www.investinginafrica.net/Portals/0/CI&GhanaTripReport.pdf

Further Information:
Ryan and his partner, Rakesh Gadani, are forming a long-only hedge fund on listed African stocks called the Kivuno Africa Fund. Assuming the paper-work goes well, he expects to open it to investors sometime in May. So far, his fund is up 82% since March 2006 inception. Compare that with a gain of only 7% on the S&P. Interested investors can contact him for a prospectus at ryan@kivunofunds.com.

Here are Ryan and Rakesh's supplied bios, FYI.

Ryan Shen-Hoover. Ryan has a B.A. Sociology (magna cum laude) degree from Eastern Mennonite University in Harrisonburg, VA. He worked as an advocate for communities affected by large dams in the southern African nation of Lesotho from 1997 to 2000. He continued this work upon returning to the United States as a member of International Rivers Network’s Africa Program. In 2006, he launched the Investing in Africa newsletter, a monthly guide for investors with an interest in African stock markets. He has traveled widely throughout southern Africa and is currently a Level I candidate in the CFA program.

Rakesh Gadani. Rakesh holds a B.Sc. Finance (summa cum laude) degree from Elmhurst College in Elmhurst, Illinois. He is currently a Level III candidate in the CFA program. He has been involved in the Kenya (Nairobi) stock exchange since 1990 when it was a small “club”. In 2002, he began to invest in other African stock exchanges. He is an avid reader and a keen follower of politics and economic trends. He has traveled widely within East Africa and currently resides in Nairobi.