TCM Africa High Dividend Equity is a high dividend equity fund, investing in listed shares in the northern and sub-Sahara regions of Africa. Initially it will focus on Egypt, Morocco and Nigeria. In addition, it will invest in Kenya, Ghana, Botswana and Mauritius. In principle, its portfolio will have limited exposure to South Africa.
The funds investment policy will be aimed at achieving capital growth as well as dividend pay outs. In principle, the fund will pay out dividend once a year with an expected dividend yield of approximately 4% per annum.
The risk profile is high, due to investments being channelled into frontier/emerging markets in Africa. The relationship between global financial markets and African markets is low, because the latter are less sensitive to international developments.
To achieve its objective, the Fund invests 95% to 100% of its total assets through TCM Investment Funds Luxembourg in units of TCM Africa High Dividend Equity (Lux). The Fund qualifies as feeder-structure.
TCM has entered into an agreement with Sustainalytics for the screening of the portfolios of the TCM equity funds on ESG criteria (UN Global Compact and Controversial Weapons).
The Fund Manager writes
During the month of May, the fund was up 2.2%, while the benchmark index fell -0.3%. In Nigeria (-4.5%), Kenya (-0.9%) and Egypt (-0.10%) the market went down, but in Morocco the stock market index increased by 2.9%. The biggest riser in the portfolio this month was Calbank PLC. The Ghanaian share increased 28.5% in value, Safaricom (+10.2%) in Kenya and Integrated Diagnostics (+8.3%) in Egypt also rose strongly.
Safaricom-led consortium dubbed “Global Partnership for Ethiopia” has signed a licence agreement with the Ethiopian Government after being announced as the winner of one of the two telecom licenses that were on offer. Ethiopia is the second-largest country in Africa by population with more than 112 million people. The country is one of the last countries in the world to introduce competition in the telecom industry.
Integrated Diagnostics Holdings (IDH) reported a record-breaking quarterly revenue performance on the back of its coronavirus-related test offering. Revenue for the quarter to March 31 of EGP1.1 billion more than double the EGP500 million seen a year before. IDH has plans to expand into new territories in Africa, the Middle East, and South Asia and highlighted a USD45 million loan secured in May from the International Finance Corporation to finance this. Following the successful quarter, IDH said it would upgrade its guidance for full-year revenue growth of over 20%.
Cal bank announced it will exploit the uptake of digital products to drive growth. Over the past year the bank’s balance sheet grew 12.3% to GHS 7.9bn and ended the year with a capital adequacy ratio of 22.3%, above the revised statutory limit of 11.5%. Operating income grew by 15% and dividend per share increased from 8.9 to 11 pesewas. The bank hopes to secure its operations with a digital-led strategy.
The fund currently holds 32 stocks in 7 different countries. The countries with the largest weightings are Egypt (31.1%), Nigeria (19.6%), and Morocco (18.6%). These markets currently have the most interesting high-dividend stocks that meet the quality requirements
No rights may be derived from this publication. You are referred to the prospectus and Key Investor Information Document for the fund's terms and conditions. These documents may be obtained from the website or the address mentioned below. The manager of the fund has obtained a licence for this fund from the Netherlands Authority for the Financial Markets in accordance with the provisions of the Financial Supervision.