Sick of hearing about China and Brazil? Just a little bit worried about all the money flooding into emerging market funds this year? Sceptical that South Korea can even be classed as an emerging market anymore? Why not try Africa?
If there was one thing that speakers at this week’s CFA Institute European Investment Conference all agreed on it was that Africa could be the next big thing for the daring investor.
Both leading economist Nouriel Roubini and Lars Christensen, head of emerging markets research at Danske Bank, believe Africa offers a viable alternative to crowded emerging markets, with economic growth likely to be driven by industrialisation and political and market reforms.
Foreign direct investment has picked up since 2000 with the Chinese building roads, ports and railways so that they can extract sought-after commodities from the interior.
Christensen cited Kenya, Mozambique, Angola and Tanzania as some of the most interesting opportunities, as these are introducing market reforms and have enjoyed growth throughout the financial crisis. “Uganda is also a good story. We are seeing the development of a financial sector in some of these markets.”