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The 2014 Emerging EMEA Research Team: Southern/Sub-Saharan Africa Equity Strategy, No. 2: Charles Robertson, Daniel Salter & team

Charles Robertson, Daniel Salter & team
Renaissance Capital
First-place appearances: 1

Total appearances: 4

Team debut: 2011

Renaissance Capital leaps from runner-up to capture second place, the position the firm held in 2011. London-based leaders Charles Robertson and Daniel Salter, a newcomer, cover the sector with two colleagues working out of Johannesburg, and the strategists impress clients with their flexibility. “They understand that you can’t use the standard, one-size-fits-all approach to evaluating these markets,” asserts one portfolio manager, and “do the best job of connecting up raw economic data with what’s happening on the ground and putting everything in context.” The strategists’ top stock pick is Guaranty Trust Bank of Nigeria, which is “head-and-shoulders above the rest of the banks we cover,” says Salter. “It has consistently led the pack in generating value-creating returns.” The bank offers investors a cornucopia of appealing features, including a high-quality loan portfolio, strong deposit base and — with an almost 8 percent share of the country’s deposit market — an attractive cost of funds. Perhaps most important, GTB boasts a savvy executive team. “Its book was one of the least affected even through the 2009–’10 financial crisis in Nigeria,” he notes, “a testament to GTB’s robust risk management skills.” Management’s cost-consciousness translates into the lowest cost-to-income ratio among Nigeria’s banks, Salter adds, which “really differentiates GTB from its peers and contributes to value-creation for shareholders.” These attributes add up to a robust 30 percent return on equity. “GTB is not interested in becoming the biggest bank, per se, but rather in becoming the most profitable bank in its target markets,” he declares, making it “the one key banking stock to own.” The shares were trading at 29.92 naira at the end of May, and their price objective is 33 naira. Robertson and Salter also co-captain runner-up teams in CEEMEA Equity Strategy and Emerging-Europe Equity Strategy; and Robertson joins with Yvonne Mhango in guiding a runner-up crew in Economics.


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