African listed equities are entering what could be the beginning of a new investment cycle after years of depressed valuations, according to executives at Imara Group, who argued during a recent webinar that improving liquidity, strong earnings growth and expanding financial inclusion trends are reshaping investor sentiment across the continent.

Harry Wulsohn, co-CEO of Imara Group, said the firm had become increasingly active in engaging investors over the past year as conditions in African listed markets improved following what he described as a prolonged bear market.

“The African listed market dynamic has improved materially over the past 18 months following a five-year bear market,” Wulsohn said during the webinar. “The underlying companies we invest in have continued to deliver record profits and dividends year after year, yet their share prices have largely not moved. This has created a widening disconnect between the fundamentals of these quality businesses and their valuations.”

Wulsohn added that liquidity had begun returning to markets while valuations were starting to re-rate, creating what he described as exposure to “both highly attractive fundamentals” and “the early stages of what we believe is a significant bull market.”

Tony Schroenn, portfolio manager and partner at Imara Asset Management, focused much of his presentation on the long-term growth potential tied to financial inclusion across Africa.

Recalling his early experiences in Kenya in 2005, Schroenn described meeting the chief executive of Barclays Kenya, who at the time believed the country’s banking growth potential was limited because most affluent customers were already banked.

“Little did he or others know, that the ground was literally moving under our feet,” Schroenn said. “A tiny bank called Equity Bank and a bright eyed entrepreneur called James Mwangi, were building the technology to reach the underserved.”

He said Equity Bank expanded from a few thousand customers to 30 million customers across East Africa through agency and mobile banking models. Schroenn said the bank, which remains one of Imara’s top holdings, reported 55% profit growth in 2025 to $600 million while delivering a return on equity above 30%.

“But this is where it gets exciting,” he said. “Despite its strong share price rally, the growth means you can still pick it up at 2.5x PE and at a price to book of 0.7x.”

Schroenn argued that the broader financial inclusion opportunity across Africa remains significant. While mobile penetration has risen sharply over the past two decades, he said effective financial penetration remains comparatively low.

“From 2000 to today, cell phone subscribers in Africa rose from zero to three quarters of a billion,” he said. “However, juxtaposed against this is effective financial penetration of only 20%, leaving a massive Financial Inclusion gap. This gap IS going to close and the direction of travel is clear.”

According to Schroenn, companies facilitating the shift from cash to digital payments are continuing to record strong earnings momentum. He pointed to first-quarter performance at MTN Nigeria and MTN Ghana as examples.

“For a sneak preview, MTN Nigeria grew Q1 revenues by 42%, within which fintech was +78% and overall PAT was +165%,” he said. “MTN Ghana’s Q1s were similarly impressive.”

He added that these results positioned MTN Group, another core holding in the portfolio, to deliver more than 30% earnings growth in 2026.

Schroenn also argued that investor interest in African assets was beginning to broaden beyond earnings-driven appreciation toward valuation expansion.

“Smart, first wave money is flowing in,” he said. “Large, long term operating investors like Vodafone, Asahi and Nedbank are stepping in, buying businesses at substantial premia to share prices.”

He also highlighted improving market liquidity as a key development.

“Liquidity in African markets held up in March and April, share prices recovered quickly and our Fund was up 12% in April,” Schroenn said.

Despite expectations for continued market volatility, Schroenn said Imara remained focused on long-term structural trends rather than short-term market movements.

“Don’t confuse noise with SIGNAL,” he said. “The signal our in-house research system is picking up, particularly in our focus area of Financial Inclusion, is very LOUD and very CLEAR.”

He added that the firm continued to identify opportunities beyond traditional mobile payments and banking, including companies digitising government payment systems and businesses with embedded payments assets that remain undervalued within larger corporate structures.

Closing the webinar, Schroenn described current market conditions as the strongest setup he had seen in more than two decades investing in Africa.

“I have been investing in Africa for 21 years, and this is by far the best set up I have seen,” he said. “Macro is strong, FX is stable, company earnings forecasts are strong, valuation multiples are still low and liquidity is rising.”