Frontier Market Focus: Africa – Cinderella offers great promise

The Mercator map projection, named after Dutch cartographer Gerardus Mercator, is politically controversial in that it makes Africa (and other equatorial territories) look much smaller than they really are. But when it comes to market capitalisation, Africa really is tiny at the moment. Africa is being substantially ignored by the majority of benchmark-conscious investors – and for good reason.

“In current benchmarks, it is a very low weighting or even absent. In MSCI World Equity, it is still mainly excluded, with only one share – Investec – making up 0.01% of the benchmark. In MSCI Emerging Markets Equity there is a bit more, but even so the value is relatively low with South Africa weighted at 5.6% and Egypt at 0.13%”, says Wytze Riemersma, CEO of Netherlands, Joure -based Trustus Asset Management BV.
“In the MSCI Frontier Markets, four African countries – Kenya, Mauritius, Nigeria and Morocco – make up about 20%”, he adds.

Click here to read the whole interview from Nordic Investor.