The announcement last week by African Rainbow Capital Investments (ARC) regarding its majority stake in Tyme Global (the holding company of Tymebank) — that it had raised new capital and would be extending its offering into the Philippines with a local partner — was almost an epiphany.
Investors now can begin to understand where this curious structure and ARC’s determination to own it are going, and it looks compelling.
Tyme Global’s local partner in the Philippines is the canny and proven Gokongwei family, which besides running a successful conglomerate, also happens to possess one of the country’s largest retail footprints. That is ideal for securing space to park the bank’s kiosks.
It is a pity, though, that the only way investors can get access to this fintech-to-a-bank play is through an investment in the holding company, which has a portfolio comprising nonfinancial assets.
Like almost all investment holding companies, ARC suffers from the dreaded “deep discount” that investors are currently applying to entities of this nature, which sees its market price trade significantly lower than its book value.
So it would be fantastic if ARC could consider providing a more direct route into Tyme as it begins to expand into markets very different to the ones investors can get exposure to through the JSE — which is predominantly African markets, and in the case of Firstrand and Investec, the large British market.
Besides the new Philippines leg, Tyme is headquartered in Singapore and has an operational hub in Vietnam, indicating there may be more Southeast Asian legs to the table.
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