Hey, Here’s a Tip: Try Africa.

Carol Pineau – The Washington Post

Copyright The Washington Post
DISPATCH: A BULLISH FRONTIER
July 6, 2008
P ssst. Have I got a great stock tip for you: Now’s the time to buy shares on the Nigerian Stock Exchange. No, really.
I know that may sound like an e-mail from the spam box, but it’s actually good investment advice. While U.S. markets have been struggling with the effects of the subprime mortgage debacle and threats of a looming recession, the total value of the stocks traded on the Nigerian Stock Exchange has doubled over the past year.
A lot of that growth can be attributed to new companies listing on the market. But next door, Ghana’s stock exchange has already returned more than 33 percent this year, and is expected to end the year as one of the world’s top growth markets. And it wouldn’t be for the first time.
It used to be that when the U.S. economy sneezed, the rest of the world caught a cold. Today, with globalization, everybody has a pretty bad flu — except for Africa, where many of the more than 20 stock markets are reporting gains similar to those of the Nigerian exchange. I’ve been working on a film exploring Africa’s frontier markets for the past couple of years, and the returns I’ve found can only be described as eye-popping. African markets have outperformed Standard & Poor’s 500-stock index and many other indexes over the past decade. I’ve met people who have doubled and even tripled their investments.
Africa today is a fast-moving continent that has made tremendous changes. And yet we in the West cling to age-old stereotypes that undermine confidence in its markets. Africa needs to be able to compete fairly for investment funds, because trade and investment are the only sustainable way out of poverty. And the rest of the world needs to take a new look at the continent, because trust me, we’re missing out on some great deals.
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