The 2.6 billion Stanlib Africa Equity Fund will invest an undisclosed significant sum of money on the stock exchanges of 17 African countries from next year.
The fund will target countries that have recently seen a sharp increase in their gross domestic product (GDP).
Botswana, Nigeria, Egypt, Ghana, Kenya, Mauritius, Morocco, Tunisia and Zambia have been identified as markets that have the potential to offer fundamental value on the continent over the long term.
And these countries have and are expecting substantial growths in their GDPs.
Botswana and Nigeria have this year experienced the biggest GDP growth at 6.3 percent and 7 percent, respectively. In 2011, these growth levels are expected to be 5.1 percent and 7.3 percent, respectively.
A portfolio manager at Stanlib, Stephane Bwakira, said the Nigerian economy was ticking up nicely with a recovery in oil prices. Bwakira said: “Upcoming elections should not provide any surprises. The appointment of key members in different government-appointed positions has provided the backbone for stable policymaking going forward.”
Egypt’s GDP growth is 5 percent this year and is expected to increase to 5.5 percent next year.
Bwakira said in the third quarter of this year, the fund had seen a strong market rebound in Egypt, with the index rising 10 percent after benefiting from renewed investor interest in emerging markets.
The country has seen a recovery in domestic demand and a decline in core inflation. Egyptian banks, according to Bwakira, are expected to perform well.
Ghana’s economy has grown 4.5 percent this year, but it is expected to grow 20.1 percent in the medium term after recent oil and gas discoveries. Its relatively small but efficient private sector could expand on the back of the oil and gas industry’s growth.
Both Kenya and Mauritius are growing at 4.1 percent. Growth is expected to surge to 5.8 percent and 4.7 percent, respectively. Tunisia is expected to move from 4 percent growth this year to 5 percent next year. Morocco’s growth is expected to shoot up to 4.5 percent from 3.2 percent.
Targeted sectors include banking, microlending, insurance, telecoms, consumer goods, tourism, cement, general industrials and mining and resources.
Dylan Evans, the director of global investment marketing at Stanlib, said there had been a “sea change” in Africa with everything moving in the right direction.
“In the 1980s, 80 percent of Africa was ruled by undemocratic governments. But that has changed,” said Evans last week.
“About 80 percent of countries on the continent are now under democratic governments and there are currently many free market economies in Africa.”