Forex Trading

The top 5 African stocks you should consider investing in for 2023 Business Insider Africa

african stocks to buy

Based on this data we can say that the forward return on equity is 19.14%, with a dividend distribution rate from earnings of 43.71% and a one-year forward earnings growth rate expected of 17.37%. Launched in 2011, the Africa Fund(CAFRX) is one of five mutual funds under the umbrella of the Commonwealth International Series Trust. It largely invests in equity and debt securities issued by African companies involved in manufacturing and mining. Over the five years before March of 2022, CAFRX experienced average quarterly returns of 4.22%. The continent has a handful of prominent exchanges and many new and small exchanges that are characterized by small trading volumes and few listed stocks.

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Despite a global pandemic that led to lower crude oil prices in 2020, SEPLAT was able to improve operational efficiencies as well as revenue. It remains a very good buy at this moment in time for any investor seeking to get a juicy return on their investment. All of the previously mentioned companies are in mining, with the exception of Sasol, which is in the oil and gas business. In addition, MiX Telematics (MIXT) is in the logistics technology business. There is a wider universe of African stocks that trade on the Pink Sheets or over-the-counter (OTC) market. For market participants new to investing in African companies, mutual funds and ETFs are the safest bet, followed by the American Depositary Receipts of select companies.

Africa Region Power Rankings

As for Vijayakumar et al. (2013), they examined the relationship between the chikungunya epidemic in India and monthly per capita income. The first section presents a review of the literature on the relationship between the epidemic and economic and stock market variables. The second section develops the material (econometric model) and the method used. Volatility profiles based on trailing-three-year calculations of the standard deviation of service investment returns. As an American, you can gain portfolio exposure to international stocks in a few different ways. Regional Agreements South Africa is well integrated into the regional economic infrastructure as formalized by membership in the Southern African Development Community (SADC).

  • That said, I would not feel too much anxiety over the South African rand’s future, as the currency is already objectively weak.
  • When we looked at investing levels in the first half of 2022, we had an influx of new users, but the average deposit sizes were generally small.
  • Note that ETFs are usually tagged by ETF Database analysts as more than one type; for example, an inverse gold ETF may be tagged as “inverse” and as “gold” and as “commodity”.
  • Its co-authors, Godfrey Mwanza and Sumeet Jain, argue that, when RPTs are abused, controlling shareholders force companies into inefficient deals that ultimately cost minority shareholders and the broader economy.
  • The links in the table below will guide you to various analytical resources for the relevant ETF, including an X-ray of holdings, official fund fact sheet, or objective analyst report.

In addition, the Southern African Customs Union (SACU) agreement with Botswana, Namibia, Lesotho, and eSwatini (Swaziland) facilitates commercial exchanges. South Africa is a member of the World Trade Organization (WTO), the G20, and the informal BRICS (Brazil, Russia, India, China, and South Africa) association of emerging economies. South Africa is also the economically most significant ratifier of the nascent African Continental Free Trade Agreement (ACFTA). According to the United Nations, the Netherlands had the largest foreign direct investment (FDI) throughout Africa in 2019. Dutch FDI stock was measured at $67 billion, followed by the UK at $66 billion, France at $65 billion, and China at $44 billion.

Offshore investors net sellers of South African stocks, buy bonds

The higher the dividend yield, the better, because it means your investment will grow faster and result in higher returns. Previously, in November 2021, the Central Bank of Nigeria granted it preliminary approval to operate a payment service bank (PSB). According to analysts, MTN Nigeria has consistently provided returns for investors on both the dividend payment and capital appreciation fronts. Data from its official website shows that at the end of 2020, it had a revenue figure of N1.35 trillion with an average dividend payout rate of 3%.

Many investors prefer to pay more for domestic stocks because business growth in international markets is considered less reliable than growth in the U.S. One way to invest in these nations is through exchange-traded funds (ETFs) and mutual funds. Not only are these funds traded on U.S. stock exchanges, but they also contain built-in diversification.

2. Average abnormal and cumulative returns around the date of March 2, 2020

As shown in Table ​Table1,1, the eight WAEMU member countries did not record Covid‐19 cases at the same moment. However, the majority of countries experienced their first cases in March. Paradoxically, Guinea‐Bissau, a country that was belatedly contaminated by the pandemic (April 16, 2020), recorded the highest number of cumulated cases on May 4 (1,650). The average number of new cases in the union is about 179 with an average of eight daily deaths. The WAEMU, which brings together eight countries, provides in its constituent treaty of November 14, 1973, the establishment of an organized financial market. In 1991, the idea of a single financial market, common to all the countries of the Union was developed to promote trade and strengthen regional integration.

african stocks to buy

But MTN Group is one of the best African stocks to buy because there’s more to the company than just utility cell phone service. Launched in 1994 with help from the South African government, MTN Group is a telecommunications company boasting nearly 20,000 employees and generating nearly $180bn in revenue. It’s the largest mobile network operator in the world and dominates the market in Africa.

Exploring your investment options

This means that local equities must offer very high nominal returns in order to compete with local “risk-free” rates. I should note before proceeding that South Africa in general is not considered to be a politically stable country, although this has been subject to much debate in recent years. The country is a relatively young democracy primarily governed by the African National Congress. While perhaps outwardly stable, there are social divisions within the country owing to historical legacies and post-apartheid governance failures.

african stocks to buy

European indices plunged from 7 to 8% causing the market to topple into a chaotic situation with declines of more than 20% since peaks in late February 2020. During the second week of March 2020, the Euro STOXX 50 index plunged by 8.45%, the DAX in Frankfurt by 12.24% and the FTE 100 in London by 9.81%. The Italian stock market has lost 17% since the beginning of the health crisis while the Milanese MIB finally ended the session at −16.92%. The Dow Jones closed with a decline of −7.83%, the NASDAQ by −7.29% and the S&P 500 by −7.64%. The other main way to invest in foreign stocks is by using a brokerage to obtain direct access to the exchange where the company is listed. A global account with a participating U.S. brokerage is suitable, or you can establish a brokerage account in the country where you intend to trade.

In Table ​Table22 are reported the AARs and the CAARs from the event study for all companies in the sample as well as the three selected sectoral indices (BRVM Industry, BRVM Finance and BRVM Distribution). The results show a decline in the stock returns 8 days before the Covid‐19 outbreak. In addition, the ARs are negative for the total sample and especially for the sub‐samples of BRVM industry and BRVM Finance.

  • The exchange has suffered from a series of delistings by small and mid-cap companies in recent years.
  • Financial markets in Asia have had very hard weekends, with the prospect of devastating consequences for the global economy.
  • Analysis of Table ​Table88 shows that for the total sample, and all the selected sectoral indices, more negative and significant ARs are observed during the first 10 weeks following Covid‐19 in the WAEMU.

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