Welcome to the Kgori Capital Insights edition for the Quarter ended 30 June 2018! We look forward to sharing some key updates and insights with you in this edition, courtesy of the Kgori capital team.
This was a very busy quarter, indeed,beginning with the inauguration of our fifth President of the Republic of Botswana, His Excellency Mokgweetsi Eric Keabetswe Masisi, on April 1 2018. The new administration was well received by the market, anchored by a renewed commitment to partnering with the private sector to ensure more Batswana have an opportunity to set up industries that empower themselves and, in turn, create much needed employment. Local capital market activity showed a pick-up in domestic economic activity,underpinned by a recovery in mining output after a disappointing end to last year. Inflation has remained sticky at 3.1%for June 2018, printing close to the floor of Bank of Botswana’s objective range since early 2015. Local stocks returned a lacklustre-0.1% (on a total return basis), while bonds delivered 1.2% for the three months to June 30 2018.
Turning to offshore markets, after a blistering end to 2017, the global economy moderately decelerated in the first half of this year. That slowdown made for a challenging environment for risk assets, intensifying market sensitivity to news on trade tensions and political uncertainty. And as much of that deceleration seems to have been concentrated in the Euro area, it was a backdrop supportive of the US Dollar, by far the most pronounced theme of the quarter. The greenback surged8.6% stronger against the Pula. Emerging Market currencies had a somewhat devastating quarter,highlighting current account vulnerabilities and US Dollar strength pushing investors to liquidate emerging market positions. Geopolitical events added to monetary policy in a few regions. The Pula appreciated 6.7% versus the Rand.
Closer to home for the Kgori Capital team,this is indeed a big year. The old adage that time really does feel like it moves much faster than it used to feels very true.It is hard to believe that Kgori Capital is turning 6 years old this September. From our humble beginnings as a small but passionate business established by a team of leading Botswana investment professionals in 2012,we have grown to a leading home-grown Asset Management firm, serving Batswana and Botswana. We continue to grow our passion and commitment to becoming significant participant in the Botswana investment management industry, for we believe Botswana business can and should set the proverbial bar ever higher. This is what we strive to do ourselves.
In pursuit of this, our biggest highlight this past quarter was the finalisation of our Unit Trust product roll-out. Our innovative retail solutions are just one part of a broader strategic effort to thrive and secure a competitive advantage by adjusting to client demands for fully-serviced solutions. Our focus is on deploying advanced tools to deliver a more outcome-based perspective on risk and performance.
Kgori Capital remains a strong, stable business. Today, we are as passionate as ever about Botswana’s growth and the development of her economy and her people as we were when we started our business. Kgori Capital is a homegrown Asset Management Company that has always strived to make an enduring difference. Our conviction remains that,indeed, a 100% citizen owned and run Asset Manager can serve the likes of the biggest local funds, as well as anyone else in the world. So as I said before, we constantly work to raise the bar.
With that, I also wish to thank you for your continued support, for this journey is one we believe we are on together, and we would not be the business we are today were it not for the support of our many stakeholders, partners and clients. I trust that you will find valuable and informative articles in our latest edition of Kgori Capital Insights, and hope you enjoy this update on our business and indeed from our business.
Click here to download Kgori Capital Insights for 2018
Author: Alphonse Ndzinge – Managing Director