http://www.economist.com/news/finance-and-economics/21575769-strategies-putting-money-work-fast-growing-continent-hottest
This article talks about Africa and how people should start creating strategies for putting money to work in the fast-growing continent. Africa’s equity markets are hot, with investors attracted by the sub-Saharan region’s GDP growth rate of more than 5% over the past three years. The main markets in Nigeria and Kenya have risen by more than 50% in the past year. Africa is short of savings and capital. That creates an opening for rich-world investors seeking a better return than is available at home. North Africa, tied to Mediterranean trade, is fairly well developed and is seen by some as a separate investment proposition. So is South Africa, the continent’s biggest economy, which has a slower growth rate than most of its neighbors and more mature consumer and financial industries. The big excitement though is in the frontier markets of sub Saharan Africa. It defiantly feels as if there is a lot more to gain than to lose.
It seems that in the past few years investments domestically have been very risky, with much less pay off due to the recession. As a result of this, I see no reason why investors shouldn't take a shot at investing in a new frontier abroad. I completely agree that it seems to be one of the highest risk to reward options available to very wealthy investors.
ReplyDeleteAfrica as a market is very tempting because it has a growing economy that is producing high returns. The only problem I see with investing in Africa is the risk involved. Even with the high returns that could occur, I think that many people would be hesitant because they fear the risk of losing their investment in the volatile markets.
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