Kenya’s Standard Investment Bank plans $100m FX-focused fund
Kenya-based online currency-trading money manager, Standard Investment Bank, plans to add more retail investors to its forex-focused fund and grow it to $100 million this year, according to Bloomberg.
In 2019, its first year, Mansa X as the fund is known, returned an average 24% and closed at $3 million, says SIB executive director for global markets Nahashon Mungai in an interview in Nairobi.
That compares with returns of 18.5% for the Nairobi Securities Exchange All-Share Index in the period, while the gold spot price rose 18.3% and Brent crude climbed almost 23%.
Mungai notes that SIB will increase its own money in the fund to grow it, without saying how much, as well as tap a client base it’s built over the past 25 years and new customers seeking to diversify their investments. The larger part of the fund is retail, he says.
Investments in the East African nation’s traditional money-market funds take up about 3% of savings, leaving room for growth. While other money managers and lenders have established treasuries, SIB is looking to leverage a more diversified portfolio that includes commodities, metals and stocks to boost its offering.
“We are now trying to create products that will accommodate the very small retail investors who have just a few hundred dollars,” says Mungai. “It is important that we also create a product for them to prevent that allure to go trade on their own.”
SIB currently signs up investors committing 250,000 shillings ($2,475) or more, a threshold they plan to lower in the first half of this year.
There are as many as 100,000 Kenyan retail traders of forex on foreign online platforms. Equity investors on the local bourse are double that number but most of them virtually inactive, according to Mungai.