Sunday, 1 June 2008

The search for hidden value

Let's start by destroying a few myths and establishing a few facts. First, and most importantly, frontier markets are not going to remain failed-states. They are just countries that are yet to enjoy the benefits of globalisation.

Right now, despite the paperwork involved in setting up the fund, we are currently analysing a company in Malawi. Apart from the adoption of Madonna's baby, the country is not exactly on most peoples radar screen. Why not? - Because most people don't even know where it is. Well they should. Since 2005, inflation has fallen from around 30% to 7%. GDP is growing at around 6%. Sure, they have a poor telephone infrastructure but for us that spells opportunity. That is why we are looking at Press Corporation, a conglomerate on a P/E of 9.3 with a 51% stake in Malawi Telecom. In addition to a 52% stake in the National Bank of Malawi and supermarket and some other interesting assets. Anyway, please don't go and rush out and but it as we have yet to finish our work on it and in any event these sort of markets are Best left to the specialists.

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