Page 6 - Haradali Annual Report

Chairman’s Statement...

Expectations

As East Africa prepares itself for a series of relatively large extractive resources and infrastructure related
projects together with increased focus on easing the barriers to trade within the block and harmonising of

certain policies at the Macro-economic level we believe that the mid to long term prospects for the region
are bright, however the reality is that most of the intra regional co-operation initiatives usually take

inordinately long to materialise therefore pushing the benet accrual horizons further out, this calls for
patience amongst long term investors such as Haradali Capital.

The IMF has projected a continuing GDP growth rate of 5% for the East African Community block or more

supported by strong government policies and increasing infrastructure projects. This will boost all sectors in
the economy if the issues in supply chain linkages are addressed and more domestic inputs are utilised in

the Infrastructure Investments. This is particularly poignant due to the fact that our fund is exposed to sectors
which include the manufacturing industry especially cement market and banking sector in the country and

region at large.

Challenges
The current investor’s biggest challenge is risk tolerance. Haradali Capital is a long-term investment fund

but when the market take a down turn and volatility of share prices manifests itself, investors tend to panic
and fear and act in a manner which is not to the best of their interest over the long term, we understand that

gyrations in nancial asset valuations are an inherent quality and part of the cyclical nature of the nancial
market.

We need to remember that, any changes that take eect in the market are usually short to medium term

and in the long-term we will experience high returns when the market corrects itself. This is certain for
Haradali even now as we experience economic challenges because we have diversied our assets across

dierent countries, industries and nancial instruments. Our Investment operations have considered
fundamental values for each company that we have invested in and our team is condent that share prices

will revert, correct and increase in the coming years in line with the future country and regional economic
trends.

The Road Ahead

It is worthy to note that despite the apparent challenges registered in the interim, over the duration of its life,
from May 2012 to December 2018, Haradali Capital has registered a nominal rate of return amounting to 90%

as opposed to 55% for the DSE Index, a whole 35% advantage.
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