Farouk Miah, co-founder of All Africa Partners, discusses how global inflation shocks are manifesting with a lag across African economies relative to Western developed markets.
Assertion Not checkable as stated
Miah: African public equities trade at 8x earnings while privates cost 8x sales
“So the valuations PE, you're paying eight times. On the private side, you're paying price to sales eight times for the similar exposure.”
Insight
Miah: African telecoms are the holy grail of voice, data, and mobile money
“Telecoms in Africa in many ways is the holy grail for telecom investors. Why? Because you still have voice growing at eight, nine, 10%. So voice is still high single digit growth. You have data growing at 20%. And then you have this unique component, which is …”
Opinion
Miah: Africa is currently the most exciting emerging market for investment
“The Middle East where I was based is still predominantly emerging market in terms of trades, and obviously Africa is probably the most exciting emerging marketplace for us.”
Assertion Supported
Miah: African equities outperformed other emerging markets in 2022
“Post-nineteen there was COVID, a lot of noise, but definitely this year is the first year in many that you've had outperformance by Africa. And very importantly to us, the bottom line continues to grow. The jaws are widening, but the bottom line continues to g…”
Assertion Partly supported
Miah: Private equity firms are taking African public companies private at 4x earnings
“We've seen private equity firms coming to the public markets, and Picking off the best jewels, which are trading at four times P, five times P and taking them private. So we have seen that materialize over the last few years in Africa.”
Disclosure
Miah: We favor African companies where the founding family retains 20% to 40% ownership
“Generally, we do like companies where the management team are part of the founding family, and they still own 20, 30, 40% because of the alignment of incentives and interests.”