CDS comdek limited.

paydirt magazine

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    With respect to people doubting the SA bank approval - I found this in the latest Paydirt Magazine Page 79 I think it gives an indication of the current feeling toward mining investment in SA.


    Why African Banks are Winners

    A growth explosion and absence of exposure to the sub-prime mortgage market make African financials and banking shares top picks for Standard Bank's Africa equity fund.

    John Mackie, fund manager at the Standard Africa Equity Fund, saw best value in shares like Nigeria's Access Bank, Guaranty Trust Bank, and First City Monument Bank.

    Mackie, whose fund currently has about $US125 million in assets and invests in pan-African stocks excluding South Africa, said: "Africa, fortunately, never got around to subprime."

    "Banks and financial services, for example banks and insurance companies in Nigeria, are coming off very low bases (and) growing their earnings anyway between 50-100% pa," the Johannesburg based fund manager said.

    "The underlying story is a growth story," said Mackie, who is targeting growth of around 25-30% in 2008 for his fund. "They've all been raising capital, there has been quite a lot of consolidation, they are all rolling out different strategies to expand, coming off a very, very low base."

    "Think about oil at $US100 a barrel," Mackie said. "They've got to put that windfall to good use and as that filters through into consumer's pockets, what (will be) the facilitator of all this? A bank and insurance company."

    Banks in the United States and Europe have taken billions of dollars of charges on exposures to sub-prime mortgages - loans made to borrowers with patchy credit histories - after the value of mortgage-backed securities held by the banks plunged.

    The Standard Africa Equity Fund has had a 25% return in the first six months since it was launched in August last year and currently holds shares in 40 companies from around eight African countries.

    It also invests in shares in African firms listed in Toronto and on London's AIM.

    Commodities are also favoured by the Standard Africa Equity Fund because of high demand for raw materials from China, with Australian-based companies Equinox Minerals Ltd and Albidon Ltd the top picks.

    He said emerging markets suffered less from any US economic slowdown with Chinese demand for raw materials continuing to go from strength to strength in 2008.

    Although positive on the 2008 outlook in Africa, investors should be cautious and remain wary of macro-type issues, Mackie said.

    A recent example of this was the violence that erupted across Kenya after a disputed election on December 27 that the opposition says was rigged by President Mwai Kibaki.

    "Kenya gave me a lot to think about over Christmas - it was a bit of a shock," said Mackie. "(But) the fact that the market appears to have not have reacted as one would have thought, makes me think that the underlying story is very strong and it's going to take a heck of a lot more than that to shake it."

    "Clearly what has happened will knock some company earnings and will put a dent in GDP growth, but if you knock it from 8% to 7% - it's still not a bad story."

    - Michael Taylor for Reuters in London.

    Sometimes there are advantages in being the slowest in the herd??????

    Maxi.... :o)
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