Posted by: union03g | June 12, 2009

Investing in BRIC(A) – Africa’s Mauritius is up 60%

There are some recent positive trends in Africa since the Fall of  2008. In fact, the new MSCI African index has beat most indexes thus far. I can’t help but to think of all those entrepreneurial scam artists in Nigeria – if only we could put their ambitions to good use! With South Africa leading the way and preparing to host the 2010 FIFA world cup (might be attending), this might be a trend to watch.

Within the Africa index, the YTD performance has been led by South Africa, +23%. The only down market YTD is Kenya, -19. For the month of May, however, the frontiers saw the biggest action: Nigeria +47, and Mauritius +60. (Mauritius, a small island in the Indian Ocean, has a diversified economy; as far as I can tell, there is no one industry responsible for this remarkable rally.)

We have to remind ourselves that it has become very hard to diversify geographically; even Africa is highly correlated to other Asian emerging markets (if that term means anything anymore) and basic material ETFs. It might be a better strategy to start picking individual oil/materials/financial/telecom companies in some of these countries.

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