Sunday, July 06, 2008

Africa: The Last Big Investment Frontier?


Washington Post -- Psssst. Have I got a great stock tip for you: Now's the time to buy shares on the Nigerian Stock Exchange. No, really.

I know that may sound like an e-mail from the spam box, but it's actually good investment advice. While U.S. markets have been struggling with the effects of the subprime mortgage debacle and threats of a looming recession, the total value of the stocks traded on the Nigerian Stock Exchange has doubled over the past year (see chart above of Nigeria's stock market index vs. the US).

Investment gurus at Goldman Sachs named Nigeria as one of the top emerging markets to watch, and in recent years, Africa has offered the world's highest rate of return, according to United Nations trade figures. And yet the continent would be far down most people's list of investment destinations, with China and India probably at the top. But while we look to invest in China, the Chinese are looking to Africa, where new roads, ports, bridges -- the infrastructure the continent so desperately needs -- are springing up everywhere, thanks to Chinese investment.

What the Chinese want in Africa is what we all want -- the continent's abundance of natural resources, including oil and nearly every strategic mineral that we need for our daily life. Africa recently overtook the Middle East in exporting oil to the United States. Who knows how long Africa's current bull run will last? But one thing is certain: Africa's the last big investment frontier. If you missed China and India, don't miss this one.

3 Comments:

At 7/07/2008 5:22 PM, Blogger OBloodyHell said...

The biggest problem I see here is instability and lack of The Rule of Law.

Historically, African nations are all too apt to nationalize things after you get them running, "for the good of the people" -- after which they run them into the ground, of course, and destroy the wealth created therein.

Africa is very much a high-risk investment at this point.

 
At 7/13/2008 3:56 PM, Anonymous Anonymous said...

This statement is not only a stereotype but also the cloud that makes the west think the region is dark when it comes to progress. But the loser will lose and the winners will be the open minded and those who keep prejudice out of the equation. I have made money, when I say money I mean money, that I can use it and pay cash for my house here in USA and have change to trade. I will not tell you to try but keep your prejudice. If you look at them as equal to yourself and relate to them as your contemporary then you will make headway as opposed to treating them as animal and semi-human them they will feed you their animalistic tendencies. So the way you persive people is the way they will react to you because they will persive you the same way.Do you know that they in Africa have their own prejudice about the west? If you react the way they persive the west then you will reactivate their own prejudice which will endanger your business friendship with them.

 
At 12/22/2008 11:59 PM, Anonymous Anonymous said...

UK house sales are now at their lowest since 1978. According to Bloomberg, new mortgage approvals have been as lower in over a decade, if not lower. The state of British economy is already pretty bad at the moment. The Pound has dropped 25% this year alone - prompting deep interest rate cuts.

http://www.bloomberg.com/apps/news?pid=20601102&sid=aWOd4MeQVgHc&refer=uk

 

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