Zimbabwe is a market that is too exotic to be top of mind for the average international investor, but not for Investec Asset Management, according to Hendrik du Toit, chief executive of the group.

Investec has been buying into Zimbabwe for some time, he says, making use of its South African roots and exploiting its advantage in the area.

It has been increasing exposure in its Africa fund and Africa Frontier private equity fund, though liquidity in the market remains an issue, says Mr du Toit.

Despite recent political turbulence following remarks by prime minister Morgan Tsvangirai that he would “disengage” from working with Robert Mugabe, Zimbabwe’s president, and his ZANU PF party, Mr du Toit remains optimistic about the long-term fundamentals for post-Mugabe Zimbabwe.

In an interview before this incident, Mr du Toit said there were a couple of triggers that had made the country a talking point for “Africa enthusiasts”. These were the positive effects from the switch to using US dollars from local currency, and the influence the government’s coalition partner, Mr Tsvangirai’s Movement for Democratic Change (MDC), is having on the economy.

Mr du Toit said before the most recent upheaval: “It is very difficult to call a bottom in a place that’s been down but we’ve seen triggers [such as the shift to using the US dollar]. There is a more palatable partner that is by and large in charge of the economy, which is a powerful signal.” Read the rest of this entry »

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