South African fund launched
OLD Mutual International, a division of the US$40 billion fund management group, has launched a unit trust for Hong Kong retail and institutional investors seeking exposure to South African stocks.
The parent company, Old Mutual Group, is a major South African financial services player with operations in fund management, insurance, pension provision and unit trusts and has extensive holdings in the country's real estate and equity markets.
The Galileo South African Equity Fund will specialise in small to medium capitalisation stocks listed on the Johannesburg exchange, focusing on the industrial and financial sectors.
Fund manager Adrian Allardice said it would invest predominantly in equities, including convertible bonds and options, with the option to diversify into fixed interest products.
Some investment analysts describe South Africa as a re-emerging rather than an emerging market, whose development was stultified by the sanctions imposed as a result of the former apartheid policies.
It is the largest economy in Africa.
The Johannesburg stock exchange's market capitalisation at US$250 billion makes it the biggest emerging market, ahead of Malaysia and Taiwan.
Capital inflows since the end of sanctions have been disappointing despite the political situation having been more stable than could have been hoped for.
Mr Allardice said: 'South Africa combines the growth potential of an emerging market with a developed infrastructure and sophisticated corporate culture more typical of industrialised economies.
'Although best known for its mineral wealth and its mining sector . . . the economy has been shifting away from a resource base to one more representative of a true emerging market economy.'