African Rainbow Capital Fund INAV up 4.6%

African Rainbow Capital (ARC) has seen significant growth, with its investment holding company experiencing a 12% surge in shares following the release of its first half results. The company's investee companies, digital bank Tyme and freight and logistics firm Linebooker, have both reached breakeven in the past six months. ARC's co-CEO, Johan van der Merwe, highlighted the success of their expansion into the Philippines and Vietnam, citing favorable regulatory environments and banking systems for their digital banking initiatives. With large populations in these countries, ARC sees potential for significant traction and growth. In a recent interview with CNBC Africa, van der Merwe discussed the similarities between South African and international consumers, noting high inflation and interest rates as shared challenges. The cautious approach to lending post-COVID has resulted in a focus on transactional services and learning from other group companies like Retail Capital. As Tyme Bank achieved break-even in December and continued profitability post-year end, van der Merwe emphasized the importance of this milestone in a competitive banking industry. Looking ahead, van der Merwe hinted at potential listing and bundling prospects for Tyme Bank in the future. With a digital banking focus, ARC aims to offer customers innovative and cost-effective services in a space where traditional banks are also venturing. The company's successful foray into the Philippines and Vietnam demonstrates its commitment to growth and expansion. When asked about Africa's potential in ARC's investment strategy, van der Merwe acknowledged the continent's vast opportunity but stressed the importance of identifying the 'low-hanging fruit' markets. While partnerships in other African countries exist, competition and economic dynamics require strategic planning. Van der Merwe sees growth potential in regions where ARC can leverage existing partnerships and market dynamics effectively. The interview also touched on Linebooker, ARC's logistics and freight entity, which has benefited from the challenges faced by Transnet. Despite the increased presence of trucks on the roads due to Transnet's issues, van der Merwe expressed hope for the improvement of the state-owned company. He emphasized the importance of a functioning Transnet for the overall logistics sector in the country. As ARC continues to diversify and expand its investment portfolio, the company remains focused on finding opportunities for growth while navigating dynamic market conditions. With a strategic approach to digital banking, logistics, and potential African expansion, ARC is positioning itself for sustained success in the ever-evolving investment landscape.