Thursday, March 01, 2007

Trade African Equities

If you add a risky stock into a portfolio that is already risky, how is the overall portfolio risk affected?
a. It becomes riskier
b. It becomes less risky
c. Overall risk is unaffected
d. It depends on the stock
Answer - it depends, whether the risky portfolio and risky stock moves in the same direction.

I am sure you have heard about the meltdown in the US stock market yesterday triggered by a down day in China and other factors. An important thing to note is the fact that African market including the JSE (Johannesburg Stock Exchange) was not affected.

This is a reason to invest in African equities!

5 comments:

t said...

How to?
Buy direct or buy pre-packaged investment funds? Any other how to info? Thanks.
Good point about low-correlation investing being a plus for investing in Africa.

Benin "Mwangi" said...

Interesting that the JSE wasn't affected. Do you think this will change as China becomes more involved in African investment?

Shola said...

In response to the comments.
To participate-- you can use the following online brokerages,
africanmarkets.com
africanselect.com
liquidafrica.com
//most directs you to a local broker on ground
I think there is an opportunity here for entrepreneurs.

On the Chinese involvement in Africa, the answer is maybe. But I think even if this is going to have an effect, it will take a while. For the following reasons
* Economic reality takes a while to affect the markets.
* Chinese investments in Africa will take some time to become real
* The overall size of the African market is small

Anonymous said...

So are you guys buying First Bank of Nigeria shares? Heard you could buy with VISA?

Take care
Ngozi

t said...

You know, I've been hoping for someone with some knowledge to write about the phenom of Naija IPOs. I hear, I hear, - let's discuss.
- Tosin

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