Friday, September 10, 2010

African Equity Markets attracting record inflows of Foreign Money

African equity markets posted an impressive record of 51 weeks of net investment inflows during the last year. This is indicative of foreign investors discovering the potential of the continent. Regular readers of LMG's research know that we believe that Africa and the Middle East will be investment hot spots during the next 3-5 years.

Obviously, this is not meant to be translated into a huge additional allocation to Africa within your investment portfolio. The markets are still relatively illiquid, and the total net inflow so far was just a bit more than USD 600 million.

Main beneficiaries were South Africa, Nigeria, Kenya, Ghana, Botswana, Uganda, Zambia and Zimbabwe. South Africa is the largest and most sophisticated economy of Africa. Even when we exclude South Africa, figures are impressive. So far YTD inflows were 4 times larger than the previous record (2007).

Click here for the original report from Reuters Africa.


1 comment:

  1. LMG Emerge believes that a maximum allocation of 5-10 percent of the equity allocation to Africa and the Middle East (combined) will suffice for the most aggressive investors.

    Those with a more moderate risk profile should refrain from an allocation in excess of 3-5 percent.

    These weights do already represent a large overweight to the region.