Where should investors look if they want exposure to the fast-growing markets of sub-Saharan Africa? Funds Global Mena profiles the main exchanges.
Africa is a huge landmass made up of many diverse countries, but when it comes to stock exchanges there is only one tribal chief. The Johannesburg Stock Exchange, with a market capitalisation of roughly $1 trillion, is by far the biggest bourse on the continent.
Its size reflects the highly developed South African economy, which has GDP on a par with Austria.
The dominance of the South African economy may, if anything, be understated by the chart (right), which is based on data from the African Securities Exchanges Association.
Many of the listings on the Namibian Stock Exchange are in fact dual listings of firms based in South Africa, such as Standard Bank and Old Mutual, while the largest listing by market capitalisation is London-headquartered mining company Anglo American.
It means turning to the third exchange in the list, the Nigerian Stock Exchange, to find a market that is both truly independent of South Africa and with real depth. The Nigerian bourse has more listings, at 194, than any other other exchange in sub-Saharan Africa bar Johannesburg, and they include companies from a range of sectors, such as Flour Mills Nigeria, Dangote Sugar Refinery and several breweries.
Below Nigeria comes the Douala Stock Exchange in Cameroon, and the stock exchanges of Botswana, Ghana and Kenya. The last of this group, the Nairobi Securities Exchange, clocked up more than $1 billion of share value traded in 2012, more than Namibia, although the market capitalisation of the bourse is less than $16 billion, according to the data.
One exchange is liable to confuse the newcomer to African investing. The Bourse Régionale des Valeurs Mobilières (BRVM) is a regional stock exchange serving the following west African countries: Benin, Burkina Faso, Guinea Bissau, Côte d’Ivoire, Mali, Niger, Senegal and Togo. According to the data, this regional conglomerate had 66 listings in 2013.
Of the Sub-Saharan exchanges, only the Johannesburg bourse is a full member of the World Federation of Exchanges, the trade group that represents the global industry.
Four stock markets are affiliates of the federation, which is sometimes a precursor to full membership. These are the Nairobi Securities Exchange, the Namibian Stock Exchange, the Nigerian Stock Exchange and BRVM.
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