AFRICA STOCK MARKETS LEAD WORLDWIDE

Africa is the second best performing regional stock market in the world after eastern Europe over the past 15 years, according to a new report.

While still small-scale compared to the big North American, European and East Asian markets, African stocks have consistently performed better over the past decade, latest research shows.

The Observer newspaper, which reported the latest findings, said that most ofthe large sub-Saharan African countries, with the exception of Zimbabwe, “have been enjoying their fastest growth in history.”

Kenyans have flocked to the Nairobi Stock Exchange over the past 18 months, but Kenya’s stock exchange is still small beer to South Africa which at $450 billion, is the largest.

Egypt, Morocco and Nigeria which have a combined worth of around $250 billion.

Most African stock exchanges are now open to outside investors, but the Observer notes that African investment funds “are still thin on the ground.”

Stock market experts are, however, still advising investors to spread their investment across African countries and not to put too much into a specific country. The most attractive options are said to be in the telecommunications sector and banking.

Yesterday, the FTSE 100 index of Britain’s leading shares edged up after United States President George W. Bush and Federal Reserve Chairman Ben Bernanke talked about tackling the credit problem that has hit financial markets.

Investors interpreted Bernanke’s remarks at a meeting of central bankers on Friday as a sign the bank would cut rates at its September meeting, sparking a one per cent rally on Wall Street.

Meanwhile, US President George W. Bush proposed measures to help homeowners avoid defaulting on risky mortgages. The index was up 8.4 points, or 0.1 per cent, at 6,311.7.

Direction

But with little on the corporate or economic calendar this session and with US markets closed for the Labour Day holiday, UK investors may struggle to find direction.

“It’s going to be obviously quiet because of the US (holiday),” said Lawrence Peterman, investment director at Eden Financial.

“We’ve had a good bounce off the lows in the last week and I think there might be some consolidation now to take stock as to what has really happened out there in the last few weeks.”

The BoE is widely expected to leave rates at 5.75 per cent, while the ECB is seen holding at 4 per cent.


SOURCE: DAILY NATION