The performance of Africa’s equity market has been solid during 2013; equalling or outperforming emerging markets as robust economic reforms continues to foster the growth of local companies, which eventually become buyers and sellers of equity.
David Lashbrook, Head of Africa Investment Strategies at Momentum Global Investment Management who made his analysis of the continent’s fledging stock market, predicted a more promising 2014, with significant build on this year’s progress expected to drive growth figures.
When quizzed on how well the continent’s equity market performance, he said: “Unlike emerging equity markets, African equity markets have performed strongly in 2013, matching or even outperforming developed equity markets.
Factors that encouraged this strong performance include insurance and pension reforms which is driving the creation of local business institutions poised to become major players in the stock market.
Also significant growth in sector-specific industries including cement, telecom and retail, buoyed by an exploding consumer base, has offered premium value for investment, pulling additional interest from an increased pool of local and international investors.
The rising interest in African equity was evident at the Closed Africa-focused Private Equity (PE) Fundraisers that has attracted over $2 billion investments this year from top international fund managers including Ethos and market debutants Vital Capital and Phatisa.
Further evidence indicating a shift in investment trend is backed by the 2013 market index. A CNBC report revealed that while the MSCI Emerging Markets Index fell 1.44 percent this year, MSCI Emerging Frontier Markets Africa ex-South Africa Index surged 10.28 percent.
According to article on the growth of continent’s stock market growth by The African Business Review, “Africa, particularly, Sub-Saharan Africa, has seen rapid growth in its number of stock exchanges, and has experienced a stock market capitalization boom in recent years.”