Tag Archives: frontier markets

Trump’s Policies Can’t Stop Africa’s Fastest-Growing Economies

trump-speaking

 

 

 

 

Although we don’t know the full extent of President-Elect of the United States Donald J. Trump’s economic policies, but there are existing “forces” out there that preclude him and his policies from stopping Africa’s growth.

“…there is cause for hope for investors with international assets, especially those invested in emerging markets. Developing economies, on the whole, are in a better position to weather uncertainty than even a few years ago. Economic and monetary policies are very orthodox, and this has been paying off. Inflation is largely under control or falling. Currency weakness may slow but should not prevent central banks from cutting interest rates to support growth. At the corporate level, there are signs that the earnings cycle is turning for the better.”

It seems to be that if the U.S. decides to isolate itself from the rest of the world and its economies (which probably won’t happen), the emerging economies of Africa and other countries will keep on growing due to their own “intrinsic”, unique and endemic forces.

“Despite everything that is going on in the U.S., emerging markets remain regions of unprecedented wealth creation where the scope of economic activity has yet to be fully reflected in stock market capitalization. Growing middle classes in many emerging economies are driving demand for everything from milk powder to cars. These regions will likely grow faster than the developed world for years to come. Unlike the financial markets or even changes in political climate, this is structural, not cyclical. Trump’s policies may close the U.S. off to international trade with some emerging countries, but such policies may do little to prevent the persistent growth of these emerging economies.”

 

African Investment Report will continue to search out opportunities for investing in Africa’s growth. Be sure to subscribe on this page and get our FREE report and updates!

 

“Trump’s policies can’t stop the fastest growing economies”: http://thinkingaloud.aberdeen-asset.us/en/thinkingaloudus/the-bigger-picture/trumps-policies-cant-stop-the-fastest-growing#utm_medium=social&utm_source=twitter&utm_campaign=thinking%20aloud content marketing_united states_english&utm_content=soc_socialpost

Trump and Africa, and What It Could Mean for Investors

trumpMany are saying that the President-Elect of the United States, Donald J. Trump, may not care about Africa, but some are saying that may be a good thing.

“Despite all this, it’s worth remembering uncertainty isn’t all just about downside. Less trade with the US could force African countries to put more effort into developing stronger trade links with each other. Intra-Africa trade is still a small share of trade for many African countries. And young Africans dissuaded from moving to the US comes with one potential advantage: decades of brain drain can be stalled and Africa’s brightest can focus on problems at home.”

So there may be certain companies, particularly in South Africa, that could take advantage of intra-Africa trade.  Meanwhile, however, there is a lot of downward pressure on the rand, making many South African companies less attractive, at least in the short term.  There are going to be more opportunities, however, with U.S. and European companies that are strong plays on Africa.

Furthermore:

“The unpredictability of a Trump presidency will create new types of opportunities for Africa and Africans. We may not know what they are yet, but we won’t know if we’re not looking.”

 

African Investment Report will continue to search out opportunities for investing in Africa’s growth. Be sure to subscribe on this page and get our FREE report and updates!

 

“It might not be the end of the world if Africa drops off Donald Trump’s map”: http://qz.com/836048/donald-trump-doesnt-care-much-about-africa-that-may-be-a-good-thing/

Goldman Sachs on Africa’s Risks vs. Rewards

goldman_sachs-svg

 

 

 

 

 

 

Colin Coleman, Goldman Sachs’ managing director for sub-Saharan Africa, thinks that despite some tough times and risks ahead, long-term prospects are optimistic:

“Despite the challenges that emerging markets have faced recently, Coleman thinks that global sentiment is improving, with Brazil forecast to come out of the recession next year and China and India emerging as ‘bright spots’.

So how does Africa compare in this global context? For investors with a long-term approach, the continent’s large, rapidly growing, under-serviced consumer base is still an attractive option. However, slow growth combined with high risk remains a deterrent.”

He is especially optimistic about East Africa (particularly Kenya and Rwanda”) and South Africa:

“‘One area of optimism on the continent is east Africa. The region has managed to escape some of the knock-on effects of lower commodity prices seen in west Africa, with countries such as Kenya and Rwanda focusing on improving their business environments.

In east Africa we are seeing quite a lot of growth… and I hear very good things about the east African experience from many companies,’ said Coleman.”

“…(South Africa’s) strong institutions are something to feel optimistic about, noted Coleman.
He highlighted that relatively “muted response” on the rand exchange rate after last week’s
events as an example of this.
So actually this tells you quite a bit about the progress that we are making in terms of this
democracy sustaining. I would say this year has been a very evidential demonstration of the
strength of all of our institutions, the constitutional chapter nine, the public prosecutor, the
ability of the IEC to run a good election… the absolute strength of the independence of the
reserve bank… and the strength of the business community and liquidity of markets which
have continued in the face of these things.”
 

African Investment Report will continue to search out opportunities for investing in Africa’s growth. Be sure to subscribe on this page and get our FREE report and updates!

“Goldman Sachs on whether Africa’s risks are worth the rewards”: http://www.howwemadeitinafrica.com/goldman-sachs-whether-africas-risks-worth-rewards/56354/

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

 

African Agriculture On the Rise With Zambeef, Among Others

woman-in-agriculture-in-africa   Zambeef (ZAM|LSE) is a company based in Zambia but listed on the London Stock Exchange, and poised to be a key player in the growth of agriculture in Africa, according to companies like VSA Capital:

“‘The potential for Africa to feed itself and in the longer-term help feed the world through the development of its agriculture sector is well known,’said Ed Hugo, at VSA.”

Some believe the stock has the potential for promising growth:

“‘We believe the stock should increase further from these levels,’ VSA said.”

In fact, some are bullish on London-listed African agriculture companies:

“VSA was bullish on prospects for London-listed African agriculture equities in general, at least compared to those listed locally.”

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

“African agriculture stocks a better buy in London than Lusaka”: http://www.agrimoney.com/news/african-agriculture-stocks-a-better-buy-in-london-than-lusaka–9896.html

 

Why Emerging Market Stocks Like South Africa (and Nigeria) Could Rise

nigerian stock exchange building   The financial institution BlackRock is saying that emerging markets stocks can rise (even further).

“Global chief investment Strategist Richard Turnill explains 3 likely outcomes that motivated BlackRock to upgrade emerging market equities to overweight:

  1. Global growth expectations pick up and interest rates stay low.
  2. Federal Reserve officials appear split on policy direction. LIBOR hit seven-year highs ahead of U.S. money market reforms.
  3. Fed Chair Janet Yellen may shed light on future policy moves in a speech [Friday] at the central bank’s annual Jackson Hole meeting.”

“EM equities are trading at a 24% discount to global developed markets on forward earnings multiples. Fundamentals could further improve, we believe, as EM companies focus on controlling expenses and targeting profits over market share gains.”

“Within EM equities we prefer countries showing economic improvements or having clear reform catalysts, including India and ASEAN countries.”

With the devaluation of the naira and other factors, Nigeria could be moving in this direction, and so could South Africa.

Find out where we’re going with these Africa investment ideas and concepts by signing up for our free newsletter! Sign up in the box to the right, and as a gift for doing so, get our FREE report: “How to Profit From Africa’s Growth Without Leaving Home”. So what are you waiting for?  Do it right now!

“3 Reasons Emerging Market Stocks Can Rise: BlackRock”: http://blogs.barrons.com/emergingmarketsdaily/2016/08/22/3-reasons-emerging-market-stocks-can-rise-blackrock/

Others Are Investing in African Banks – Are You? (First in a Series)

Bank of Africa   Several financial institutions, including the Dutch bank, Rabobank, have created Arise, to participate in deals in banks in Africa, including the Bank of Africa, a pan-African banking conglomerate.

“Arise sera opérationnel à partir du 1er janvier 2017.

Rabobank apportera ainsi ses parts dans Zambia National Commercial Bank (Zanaco, 66 agences, environ 1 million de clients et 330,7 millions de dollars de crédits), le tanzanien National Microfinance Bank (175 agences, plus de 2 millions de clients et un total de 1,1 milliard de dollars de crédits), le rwandaisBanque populaire du Rwanda (BPR – 192 agences, 626 000 clients et 159,6 millions de de dollars de crédits), le mozambicain Banco Terra BTM (9 agences, environ 28 000 clients et 47,4 millions de dollars de crédits) et l’ougandais DFCU Bank (45 agences, 256 000 clients et 247,5 millions de dollars de crédits).”

Translation:

“Arise will be operational from 1 January 2017.

As a result, Rabobank will bring its stake in Zambia National Commercial Bank (Zanaco, 66 branches, approximately 1 million customers and 330.7 million dollars in credits), the Tanzanian National Microfinance Bank (175 branches, more than 2 million customers and a total 1.1 billion in credits), the Rwandan Banque Populaire du Rwanda (BPR – 192 branches, 626,000 customers and 159.6 million dollars of credits), Mozambique’s Banco Terra BTM (9 agencies, 28 000 customers and 47.4 million of loans) and the Ugandan DFCU Bank (45 branches, 256,000 customers and $ 247.5 million of credits).”

These “investor groups” are investing in the long-term growth in Africa through its financial institutions that believe in its future.  In this series, we will discuss and look at banks you might want to invest in.

“Plusieurs prêteurs européens créent un holding d’investissement dans les banques subsahariennes” (“Several european lenders create a holding company to invest in sub-Saharan banks”):  http://www.jeuneafrique.com/346815/economie/plusieurs-preteurs-europeens-creent-holding-dinvestissement-banques-subsahariennes/

Why J.P. Morgan Is Expanding Its African Activity and What This Could Mean For You

jp morgan

Agence Ecofin, a French financial news publication, recently reported that J.P. Morgan announced the appointment of Kevin Latter to to head its South African subsidiary and its investment banking business in Sub-Saharan Africa.

As the article says, this underscores the growing importance of this region to them:

“Même si le secteur est en repli depuis le début de l’année 2016, de nombreuses expertises et analyses défendent l’hypothèse selon laquelle, les bas niveaux des prix des actifs en Afrique sont une opportunité  pour de prochaines fusions acquisitions, afin de bénéficier des effets positifs des synergies de groupe.”

Translation:

“Although the sector is in decline since the beginning of 2016, numerous experts and analyses defend the hypothesis that low levels of asset prices in Africa are an opportunity for future mergers and acquisitions, in order to gain from the positive effects of group synergies.”

They are looking at “low levels of asset prices”.  This might mean that there are some “bargains” for those  of us who are interested in buying African stocks. Hmmmm…

“JP Morgan estime pour sa part que des investissements visant à prendre des positions sur des sociétés cotées avec un contrôle de l’actionnariat seront en hausse dans la région.”

Translation:

“JP Morgan takes the view of taking controlling positions in investments in listed companies that will rise in the region.”

So they believe that there are “listed companies” (on the stock exchanges) that will rise in Sub-Saharan Africa.  So do we here at Africa Investment Report. If you haven’t yet, be sure to subscribe on this page to get updates.

“JP Morgan recrute un expert en fusions acquisitions pour l’expansion de ses activités africaines” (sic): http://www.agenceecofin.com/banque/1807-39625-jp-morgan-recrute-un-expert-en-fusions-acquisitions-pour-l-expansion-de-ses-activites-africaines

Is Africa the New Asia?

America, Europe, Africa, Asia signpost

America, Europe, Africa, Asia signpost

Martyn Davies, managing director for emerging markets and Africa at Frontier Advisory Deloitte, thinks there is a chance that Africa could be the next Asia as far as economic growth is concerned, but:

“Africa’s notoriously non-inclusive growth model must adapt, and adapt fast, in order for real economic transformation to take place. Countries will need to deepen their economies through diversification and those that are able to achieve this will move towards a more qualitative and ultimately sustainable growth trajectory. This has been the story of Asia over the past three decades. Africa’s tilt toward Asia has been up until now a reflection of the direction of trade and flow of trade between the two regions. There are however, deeper lessons in sustainable growth and developmental that Asia presents to Africa’s frontier economies.”

Some say this is the last investment frontier. Are you invested in it?  Sign up for our free report and we will keep you posted!

“Will Africa follow Asia’s developmental growth trajectory?”: http://www.howwemadeitinafrica.com/will-africa-follow-asia-developmental-growth-trajectory/55137/

 

Rezidor Hotel Group Believes in African Growth – Do You?

carlson rezidor hotel group

The Rezidor Hotel Group, part of the Carlson Rezidor Hotel Group, remains committed to Africa, with currently 80,000+ rooms and 22,000+ in the pipeline.

“We are committed to the continent and will continue to expand our network in line with our clear strategy, covering capital cities and selected hubs across Africa to drive scale and unlock value for our owners, partners, employees and guests”, commented Elie Younes.”

They own the Radisson brand and its brand extensions, among others, and it is reputed to be the largest hotel chain in Africa.

You can only buy their stock through the Stockholm Stock Exchange (STO), but it may be well worth it as a long-term investment.

They believe in the long-term growth of Africa; shouldn’t you?

“Rezidor keeps development momentum despite challenging market conditions and reaches 80,000 rooms in operation” (sic): http://www.hospitalitynet.org/news/4077192.html