Boston Consulting Group's -- Lions of Africa Roar
Boston Consulting Group did a study on investing in African businesses -- Here's a list of how you can add them to your portfolio
Why would you want to invest in Africa? Here are some points they make about Africa:
- With just 4% of global GDP they have 20% of the world's land and 15% of it's population
- Between 2000 and 2008 Africa's GDP grew 5.3% annually but the global GDP only grew 4% for the same time frame
- In 2009 Africa's GDP grew 2% -- US dropped 4%, EU dropped 2.8%, Latin America dropped 1.5%
- These companies do business not only in their own country but in the rest of Africa and around the world as well
- The companies mentioned in their survey far outstripped the rest of the world in increased sales and earnings growth
The best evidence of promise is in the return on investment for investors. If in November 2000 you would have made a $100 investment In the African Challengers 40 by November 2009 your annual rate of return and investment would be:
- African Challengers -- 24.8% annual return for $900
- MSCI Emerging Markets -- 11.8% annual return for $303
- S&P 500 -- negative 0.8% annually for $92
They looked at all the companies in the African continent and boiled the list of 600 possible companies down to the 40 they think might be worthy of investment. Not all can be purchased in the US but I managed to track down 14 that trade in the US as either ADR's or on the exchanges. Here is the list:AAUKY -- Anglo American
APNHY -- Aspen Pharma
BRRAY -- Barloworld Ltd
CIBEY -- Commercial Int'l Bank
IHLDY -- Imperial Holdings
MTNOY -- Mountain Group LTD
MURZY -- Murray & Roberts
NPSNY -- Naspers LTD
ODMTY -- Old Mutual
SBGOY -- Standard Ban Group
SBMRY -- SAB Miller
SNHFY -- Steinhoff International
SPP -- Sappi Ltd
SRHGY -- Shoprite Holdings
Before you consider adding any of these to your portfolio do your complete due diligence like you would with any other stock.
Jim Van Meerten is an investor who writes on investing here and on Financial Tides. Please leave a comment below or email JimVanMeerten@gmail.com
Disclosure: No positions in any of the stocks mentioned in this article at the time of publication.
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Serious issues like drought and the deterioration of the developed world spell opportunity for this industry leader.
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