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Jim Van Meerten
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Jim Van Meerten is an advisor to Marketocracy Capital Management and writes on financial subjects here and on Barchart Portfolio Blogs and Seeking Alpha. He earned a BS in Accounting and Business Administration from Berry College; a Juris Doctorate from the Woodrow Wilson School of Law; and... More
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Marketocracy Capital Management
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  • Invest in BCG's Lions of Africa 0 comments
    Jun 5, 2010 3:19 PM
    On of the hottest reports quoted on the Internet last week was the report called The African Challengers: Global Competitors Emerge for the Overlooked Continent by the Boston Consulting Group.

    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 the stocks listed at the time of publication
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