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Though some investors have started looking closely at African Rainbow Capital Investments (ARCI) as a possible value stock, its share price has been a truly dismal performer since listing in 2016, losing 75% during that period while net asset value (NAV) has hardly moved.

Discount to NAV has widened significantly. As a rough rule of thumb, discount to NAV should typically be in the range of 20% to 30%. But even before the share price collapse in equity markets triggered by the coronavirus outbreak, ARCI’s discount was already much wider. In December 2019, the intrinsic NAV was 952c per share, compared with the current share price of 260c, making that a 73% discount to NAV...

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