Africa Stocks Take Lead For Global Equities Market In 2024

After a punishing start to the year, shares in Africa have rebounded and are now the leading performer for the global stock market in 2024, based on a set of ETFs tracking the world’s main regions through yesterday’s close (May 28).

VanEck Africa ETF (AFK) is up 16.6% year to date. That’s a healthy premium over the global market equity market’s 9.2% gain (VT). It’s also ahead of the US stock market (VTI), which is up 10.7%.

After bottoming in March, AFK mounted an impressive recovery, briefly interrupted in the global selloff in April. Over the past month, the fund has regained its bullish profile and rallied more than 9% so far this month.

What’s driving the revival in animal spirits for AFK? The largest sector allocation in the fund is in materials (36%), which has been a plus this year as commodities prices have risen.

Another factor may be linked to politics in South Africa, which represents the largest country allocation in AFK at 38% of net assets (as of Apr. 30), according to Van Eck. Today’s election is expected to diminish the influence of the African National Congress, which has maintained a parliamentary majority since apartheid ended three decades ago. By some accounts, that possibility lays the groundwork for a change in economic policy that may ramp up growth.

Although the ANC is still expected to remain the largest party, analysts predict it will lose its majority for the first time and be forced to share power with one or more competing parties. The possibility of much-needed economic reform, in other words, is a possible outcome of today’s election, which may be a factor in driving AFK’s share price higher.

But the depth of South Africa’s economic challenges leaves plenty of room for caution. As The Economist observes, the stakes are high for today’s election and the odds for a quick round of reform are low, due to the depth and breadth of problems:

“Thirty years after the end of white rule South Africa is in trouble. Graft is endemic, GDP person is lower than it was in 2008 and the state is becoming ever less effective. The temptation to resort to ruinous populism to stay in power will increase. Though the worst outcomes may be averted this time around, South Africa cannot escape fateful choices for ever.”

The acid test for South Africa, and perhaps the

St James’s Place set for FTSE 100 demotion as Liontrust eyes FTSE 250 in upcoming reshuffle

FTSE Russell’s indicative quarterly review changes published today (29 May) have suggested SJP could be demoted to the FTSE 250 next month. The potential move follows a 26.5% slump in the wealth manager’s shares in the year to date, according to data from Morningstar. The firm has faced scrutiny from UK regulators regarding its fee structure, pledging in October to remove charges for early withdrawals by clients, effective from the second half of 2025. In February this year, the wealth manager’s shares crashed after announcing a £426m provision for potential client refunds and slashing i…

Clean Energy Ventures raises $305 million to back early-stage climate startups

Climate-focused venture capital firm Clean Energy Ventures said Wednesday it raised $305 million for its second fund. The fund was oversubscribed amid investor appetite for emissions-reducing technologies. Areas of focus for the new fund include industrial decarbonization, plastics and grid-enhancing technologies like virtual power plants. Private equity investment in the energy transition is also growing, hitting nearly $30 billion in 2023. Solar panels and wind turbines in the Netherlands. Daniel Bosma | Moment | Getty Images

Clean energy stocks may be underperforming in the public market, but there is still great appetite for companies focused on decarbonization in private markets — with Clean Energy Ventures’ new fund serving as the latest example.

The climate tech firm said Wednesday that it raised $305 million for its second fund, five years after closing its first fund. This latest fund was oversubscribed — the initial target stood at $200 million — but interest from limited partners including The Grantham Foundation, Builders Vision and Carbon Equity led to a higher raise.

The firm is already putting the new money to work, focusing on technologies that go beyond the traditional green investments of solar and wind.

Co-founder and managing partner Daniel Goldman identified industrial decarbonization as one compelling vertical — specifically emissions-reducing technology for the cement and steel industries.

“When you think about where do we need to have material impact, and where are sectors that technology really hasn’t changed for many, many decades, steel and cement rank at the top of the list. So we think there’s huge opportunity there,” he told CNBC.

Two other areas of interest for the new fund include plastics — both more efficient recycling as well as cost-competitive bioplastic production — and grid-improving technologies for distributed energy, such as virtual power plants.

Clean Energy Ventures backed 20 companies in its first fund and has already made six investments via its second fund, including Israel-based green ammonia company Nitrofix, as well as sustainable aviation fuel company Oxccu, which is based in the U.K. Clean Energy Ventures is also opening a new office in London, with Goldman calling the European opportunity “really incredible,” while also pointing to opportunities in Israel.

A lot has changed in the renewable energy landscape since 2019 when Clean Energy Ventures

CNBC

Premier Miton’s Ian Rees to assume full responsibility of multi-manager team

Effective from 1 July, Rees will take over the day-to-day management of the funds as now former co-head David Hambidge steps back. Hambidge will continue to chair the team’s macro and markets meetings, all of which feed into all the multi-manager fund strategies. Premier Miton replaces manager on newly-acquired GVQ funds Rees joined Premier Miton in September 2000 and has overseen the multi-asset multi-manager funds since April 2005. He will take on responsibility for the firm’s eight multi-manager funds, including Premier Miton Multi-Asset Distribution, first launched in 1995. …

Eurozone Inflation Preview: What to Expect from May’s Data

Prices are forecast to have risen by 2.5% on the year before, slightly higher compared to March, according to FactSet consensus estimates. Core inflation is expected to be stable at 2.7%.

“The increase is likely to be driven by a reversal of falling volatile items last month, and base effects resulting from the introduction of Germany’s subsidised train tickets last May,” the Algebris Investments Global Credit team said in a note on Monday.

In April, the greatest contributors to the annual euro area inflation rate were services (+1.64 percentage points, pp), followed by food, alcohol & tobacco (+0.55 pp), non-energy industrial goods (+0.23 pp) and energy (-0.04 pp), according to Eurostat.

A Slight Uptick in Inflation – No Cause for Panic

“Having fallen sequentially from December, some investors might be dismayed to see this number running up once again,” says Michael Field, European market strategist at Morningstar, But he says there are three things to bear in mind: 

• Given the many components in the inflation equation, it is highly unusual to see straight line declines in the number. In short, we’ve been lucky so far. A small increase month on month is no cause for panic. Although there are some lingering concerns about services inflation in Europe, the trend in inflation is clearly downward;

• Inflation in Europe is running at the lowest rate of any of the large Western economies, a full percentage point lower than in the US, and only 0.4pp off the European Central Bank’s targeted level. With more than 90% of economists polled expecting the ECB to cut rates in June, small upward moves in inflation, such as this, are highly unlikely to prevent this; 

• Core inflation, the measure of inflation that those in the know are most focused on, is expected to be flat in May at 2.7%. Core inflation strips out the noise of volatile components, such as food and energy prices. That core inflation has fallen by half in just 12 months – and remains low – is a further indicator that we are in a good place.

What Will the ECB do After June’s Meeting?

Eurozone inflation data are crucial to the process of predicting what the ECB will do next, and, specifically, when it will cut rates.

A key inflation driver is wages. ECB’s negotiated wage tracker showed an increase to 4.7% year on year in Q1 from 4.5% in the fourth quarter

Foresight Sustainable Forestry share price soars 30% on £167m cash offer

In a stock exchange notice, the trust said it had reached an agreement with Arizona Bidco, a wholly-owned subsidiary of Averon Park, to acquire the entire ordinary shared capital of the trust that it does not already own for 97p per share in cash.  The offer represents a premium of around 32.8% to the closing price of 73p per share on Tuesday (28 May), and a discount of approximately 5.1% to the unaudited net asset value of the trust of 102.2p per share, as at 31 March.  Arizona Bidco is a newly-incorporated special purpose vehicle established by Blackmead, which owns 29.6% of FSF’s i…

Rivers of Sewage: Britain’s Failing Experiment

The UK is one of the only countries in the world to have privatised water. Now the system is collapsing, with investors writing off billions and wondering if it was all worth it.

If you go for a swim in an English river this summer, your chances of coming face-to-face with a floating lump of human excrement are – according to official figures – uncomfortably high. Last year, sewage was dumped into England’s rivers for a total of 3.6 million hours, up 54% on the…

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Shareholders vote for wind-down as abrdn Property Income sells into ‘valuation nadir’

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California passes bill requiring state approval of PE healthcare acquisitions 

The California State Assembly has passed a bill requiring private equity firms and hedge funds to obtain consent from the state’s Attorney General prior to any change of control or acquisition of healthcare facilities or provider groups. 

Partners Jon Zucker and David R Carpenter as well as associate Gabrielle Feliciani at US law firm Sidley Austin wrote on the firm’s website that bill AB 3129 is “currently being considered by the California senate”, which means that stakeholders are still able to “influence the legislative process”.

Authored by Democrat Jim Wood, the bill requires firms to give at least a 90-day notice of their intentions, after which the Attorney General — currently Democrat Rob Bonta — can either “consent to, give conditional consent to, or not consent” on the grounds that it “may have a substantial likelihood of anticompetitive effects or may create a significant effect on the access or availability of health care services to the affected community”.

The bill also prohibits private equity firms from controlling or directing any physician or psychiatric practice conducting business in the state, as well as entering any agreements or arrangements “in which that private equity group or hedge fund manages any of the affairs of the physician or psychiatric practice in exchange for a fee”.