Tag Archives: Brexit

Old Mutual On the Rise and Reorganizing

old_mutual_2   Old Mutual (OML|LSE) has been around for a long, long time, but it is adapting to the times and it is a growth stock.

” The stock is up 111% over the past five years and has performed pretty well in recent months as well.”

They are going through a major “reorganization”, recognizing the growth of Africa and the emerging markets:

“This is particularly impressive given that it’s going through a major overhaul, which will see the business try to liberate value by splitting itself into four parts: Old Mutual Wealth, South African lender Nedbank, the South African Old Mutual Emerging Markets business and its US institutional asset management arm Old Mutual Asset Management. It has now exited all its continental European operations, ahead of a planned London flotation later this year. Reports suggest it may retreat from listing its UK wealth management arm, due to the mounting costs of upgrading its investment platform, and could opt for a sale instead.”

African Investment Report will continue to search out these types of companies. Be sure to subscribe on this page and get our FREE report and updates!

“These 2 solid income stocks merit a place in your portfolio”: http://money.aol.co.uk/2016/10/05/these-2-solid-income-stocks-merit-a-place-in-your-portfolio/

Sub-Saharan African Growth Slumping? So Says World Bank

lion-1551759_960_720   The World Bank has cut their prediction for sub-Saharan Africa for 2016 to 1.6%.

“The disappointing rate of economic expansion is well below the global average of 2.3%, the World Bank said in its twice-annual “Africa’s Pulse” report.

Just in April, the World Bank publication had seen growth in sub-Saharan Africa reaching 3.2% this year, but the slide in the region’s two biggest economies, Nigeria and South Africa, as well as other oil and commodity exporters, has been steeper than anticipated.”

They don’t sound very confident about the future, either:

“The report saw the region growing by 2.9% next year—still below the 3% expansion rate of 2015—but warned that “the balance of risks… remains heavily tilted to the downside.”

This means that even that 2.9% growth projection for 2017 could be optimistic as low oil and commodity prices could persist.”

Okay, so we really have to look for the “bargains”!

And wasn’t it Warren Buffett who said, “Be fearful when others are greedy and greedy when others are fearful.”? Just sayin’…

African Investment Report will continue to search out these types of companies. Be sure to subscribe on this page and get our FREE report!

 

“Sub-Saharan African Growth Slumps Says World Bank”: http://www.wsj.com/articles/sub-saharan-african-growth-slumps-says-world-bank-1475148609

 

Emerging Foreign Investment Flows May Double: Time to Invest?

Money out of a plastic pipes    This could be the time to invest in emerging market countries, of which South Africa is one. (Some also mention Nigeria as an emerging market country, but it is still arguably a frontier market one.)

“Foreign investment in emerging markets should double this year to $550 billion compared to 2015, despite local selling pressure and Brexit, according to the Institute For International Finance.”

“In its July report,  the group explained its reasoning behind why emerging markets will remain attractive to foreign investors. Here are eight important assumptions from the institute’s lengthy report, and comments from the release on profitability and country exposure:

  1. Investors want yield and that is a key driver for emerging market capital flows.
  2. Brexit could intensify appetite for emerging market growth.
  3. EM economic growth is in a gradual cyclical recovery.
  4. The U.S. Fed is unlikely to produce hawkish policy surprises, which would draw investors to U.S. yields from EM yields.
  5. China is likely to avoid a disorderly movement in its currency, the renminbi, in order to keep short-term growth in line with its target, despite the resulting slowness in structural reform and high-and-rising debt levels.
  6. Brexit is likely to have a muted impact on emerging markets except those in Eastern Europe.
  7. Stabilization of commodity prices should benefit EMs, with oil prices to remain around the $45-50 per barrel in the third quarter.
  8. EM valuations are attractive.”

Many South African-based multinationals are already in and/or expanding into other parts of Africa.  This could be a good time to look at them. We’ll keep you posted!

8 Reasons Emerging Foreign Investment Flows May Double: http://blogs.barrons.com/emergingmarketsdaily/2016/07/14/8-reasons-emerging-foreign-investment-flows-may-double/2/

Time to Ring the Bell for Nigerian Stocks?

333573

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The Hon. Yakubu Dogara, Speaker of the Nigerian House of Representatives, rang the closing bell for the Nigerian Stock Exchange (NSE) this past Friday. Leaders in the Nigerian legislature are pushing for reforms and innovations for the exchange.

“The Hon. Tajuddeen Yusuf (PDP, Kogi)-led House Committee on Capital Market and Institutions last month held a conference on the capital market and Nigeria’s economy in Abuja with a view to brainstorming on how to mainstream the market as a major driving force in repositioning the nation’s economy via initiatives that will enable ordinary Nigerians (to) key into opportunities available at the Exchange to increase their propensity for long term investment.”

This could be very positive for Nigerian stocks. There were other indications in a previous post that outlook for Nigerian stocks could improve.  We need to monitor NGE carefully.

“Dogara to Ring Closing Bell at Nigerian Stock Exchange” : http://thebossnewspapers.com/2016/07/08/dogara-to-ring-closing-bell-at-nigerian-stock-exchange/

South African ETF Proving “Resilient”

Front view of punching fist on gray background, flag of South Africa

Front view of punching fist on gray background, flag of South Africa

South Africa is “bouncing back” from the Brexit “crisis”, despite what the naysayers were predicting.

“So much for Brexit’s impact on the global economy. With this week’s rally, the iShares MSCI Emerging Markets exchange-traded fund (EEM) is now up more than 6% for the year as the second quarter winds to a close.

BEST YTD%
Peru 46%
Brazil 41%
Colombia 24%
Russia 19%
Thailand 17%

South Africa has proved resilient, up 11% year to date.

 

“Emerging Markets’ Best and Worst Countries of 2016”: http://blogs.barrons.com/emergingmarketsdaily/2016/06/30/emerging-markets-best-worst-countries-of-2016/

Are Nigeria and the Rest of Africa Risky Bright Spots After Brexit?

brexit2     I owned the Global X MSCI Nigeria ETF (NGE) a while ago, but dumped it because there were all kinds of political problems there and the stock was going down fast. Maybe I should have held on, and I’m considering buying it again.

“And in Africa, the Global X MSCI Nigeria ETF (NGE) was among the few ETFs momentarily in the green. It was trading flat to higher after tumbling 14% over the past four weeks on Nigeria’s currency devaluation. The fund is shaping up to be the best performer of the week among developing market ETFs, with a rise of nearly 9%. If you bought the fund at the right time, that’s not so shabby.”

And maybe this speaks to Africa not suffering much or at all from Brexit, and that there are some stock-buying opportunities to come.

“3 Risky Bright Spots After Brexit: Gold Miners, Brazil Bank, Nigeria?”: http://blogs.barrons.com/emergingmarketsdaily/2016/06/24/3-risky-bright-spots-after-brexit-gold-miners-brazil-bank-nigeria/