THE FUND

The fund rose 0.9% in January, underperforming the benchmark MSCI EFM Africa ex South Africa Net Total Return Index, which rose 4.1%. January’s underperformance mainly came from the underweights in Kenya (0% of assets) and Morocco (0%). The overweight in Botswana (4% of assets) had the biggest positive contribution to the relative return. On a sector level, the fund gained from overweigths in Health Care and underweigths in Energy. The largest negative contributions, relative to the benchmark, came from overweights in Financials and Consumer Discretionary. The Swedish Krona depreciated by 0.7% vs the USD in January, adding to the SEK-return in the month. We decreased our exposure to Egyptian consumer stocks in January after a strong run lately. We also reduced our position in Nigerian Stanbic for the same reason. We are now looking closer at several other investment options. (all changes in SEK)

MARKET

The African markets (MSCI EFM Africa xSA +4.1%) performed worse compared to the rest of the world, with Frontier Markets (MSCI FMxGCC) rising 7% and i.e. American S&P500 registered its best January performance (+10%) in over 30 years. The best performing market in Africa in January was South Africa rising 13.6% as the South African Rand strengthened by more than 7% versus USD. The worst African performer was BRVM (a joint exchange for e.g. Senegal, Ivory Coast and Benin) and Ghana, falling 5% and 2.8% respectively. The Egyptian (+8.7% in January) stock exchange saw increased interest after inflation in December dropped 12% from 15.7% in November and 17.7% in October. Lower inflation increases chances of rate cuts already during the first half of 2019, which was rewarded by the stock market. The local bond market also recorded increased interest from foreign investors and the Egyptian Pound also strengthen by 1.5% vs USD. The stock market in Nigeria (-0.2%) fell with low trading volumes as most investors are on the side-line ahead of elections in mid-February. Election intensity is picking up with plenty of accusations of lies and cheating from the opposite side in combination with promises of a better future with “the correct” election outcome. President Buhari’s decision to suspend the chief judge Onnoghen from the Supreme Court ended up taking most of the spotlight. Claims of multimillion-dollar transactions on his personal accounts where presented as the main reason, but was fiercely rejected by Onnoghen himself and the case is due to be tried in court. The EU as well as the US has criticized the move by the government, expressing worries of election interference in case the results get challenged in court later on. Kenya (+8.2%) Inflation in December decreased to 4.7% from 5.7% in November and the central bank kept its main benchmark rate unchanged at 9%. Kenya’s very fragmented financial sector got less fragmented as NIC Group and Commercial Bank of Africa (CBA) announced the intention to merger. The combined entity will become one of the top 3 banks in the country, providing intensified competition for the today leading Equity Bank and Kenya Commercial Bank.

DISCLAIMER: Capital invested in a fund may either increase or decrease in value and it is not certain that you will be able to recover all of your investment. Historical return is no guarantee of future return. The Full Prospectus, KIID etc. are available on our homepage. You can also contact us to receive the documents free of charge. Please contact us if you require any further information: +46 8-5511 4570.