Markets shrug off political upheaval in part of Africa

Investors have largely shrugged off the recent political upheaval in a number of African countries, like the Westgate Shopping Mall terrorist attack in Kenya.

This is the view of Old Mutual African Equities portfolio Manager, Cavan Osborne who said who said listed equities investment opportunities were growing across the continent. Osborne’s view came amid revelation that Old Mutual Investment Group is planning to raise about R10bn to further boost its investment across the African continent.

Speaking at a media round table yesterday Osborne said “With a young and growing population demographic, Africa is showing huge economic growth prospects owing to its low base and supported by its demographics”.

“Adding to this investment case for Africa is the low correlation of its markets to world markets.”

Osborne said even though Africa has seen significant recent political upheaval, opportunity continues to grow across the continent. “Following the recent Westgate Shopping Mall terrorist attack in Kenya, the markets didn’t react at all. In Egypt the stock market is still strong, despite the violent protests, and after a brief period of uncertainty following its elections in July, Zimbabwe continues to be attractive to investors due to high quality management, similar infrastructure to South Africa and a lack of currencies risk.”

When it comes to specific opportunity regions, Osborne warned that Africa is a huge continent, and it is dangerous to generalise. “However, we see particularly exciting opportunities in Nigeria and Kenya, and to a somewhat lesser extent in Zambia, Ghana, Ivory Coast, Mozambique and Mauritius, owing to their domestic growth opportunities and investment in key growth sectors such as infrastructure, energy and agriculture.”

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