Nico Asset Managers Limited, an investment advisory firm, has introduced the offshore investment offering targeting high-net-worth individuals and institutional investors for currency stability and diversification.
In a statement, the firm, which is a subsidiary of Malawi Stock Exchange-listed Nico Holdings plc, said the exclusive service, in partnership with Sanlam Private Wealth Mauritius Limited, will also enable pension funds and institutional investors to attain global diversification, currency stability, capital preservation potential for higher returns and asset protection.
Reads the statement in part: “Diversification will reduce reliance on a single economy and access a broader range of investment opportunities, including emerging markets and high growth sectors.
“Capital preservation: Invest in stable hard currencies like dollar, euro pound and Japanese yen to mitigate the risk of local currency devaluation and asset protection which secures your wealth in a legally sound and financially stable jurisdiction.”
The firm further said that the initiative offers three global investment portfolios, namely conservative by targeting low risk investments for stability and capital preservation, balanced by targeting moderate risk investments for steady growth and growth by targeting higher risk investments for long-term capital appreciation.
Experts have since said the offshore investment offering will provide foreign exchange relief to the country in the long-term while enabling individual investors to diversify their investment, but cautioned that without proper regulations it could result in externalisation of capital.
Investment analyst Benedicto Nkhoma said in an interview on Tuesday that the offshore portfolio will enable local investors to benefit from access to world-class financial advisory to invest in the global market.
He said: “The impact on the economy is that in the long run foreign exchange returns from such assets will help in increasing the source of foreign exchange.
“Investors in the local economy that would want to invest in such markets may be forced to start generating their own foreign exchange through agribusiness, commodity trading and mining thereby impacting the real economy.”
On his part, financial expert Brian Kampanje, in an interview on Tuesday, described the initiative as attractive to investors seeking organic expansion of the factories because the foreign currency denominated investments would be able to hedge against the foreign currency exchange rate.
He, however, called for proper monitoring as other investors would be desperate to externalise foreign exchange in the name of investment thereby further deteriorating the country’s already negative balance payment position.
He said: “There could be some substantial negative impact to the economy if substantial forex is allocated to the investment in the other economies while Malawi fails to pay its import bills for the crucial products such as fuel, inorganic fertilizer, medicines and others.
“Other issues such as job creation and unintended consequences on cost push inflation due to even severe scarcity of forex should be evaluated.”
Minority Shareholders Association of Listed Companies secretary general Frank Harawa said the investment opportunity is exciting, but stressed that there is need for more information so that investors make the right decisions.
Nico Asset Managers initiative comes after local investors, particularly pension funds managers, expressed interest for such investment opportunities.
