Investing in Africa
Discussion
Hargreaves Lansdown, have just e-mailed the details of the New Star Heart Of Africa fund. I'm sorely tempted, but it's an area i'm totally out of touch with. Does anybody have any experience of African investments, any opinions, directly investing perhaps?
It's abit of a gamble, granted, but then I thought investing in China was a bit of a gamble
It's abit of a gamble, granted, but then I thought investing in China was a bit of a gamble
In many African countries everything is done by bribes and backhanders.
That is the reason why many are still in the third world. Exports and imports are highly taxed, and of course if you want to get something done in a reasonable amount of time, you need to bribe.
For example, in one African country to get someone to pay you by taking them to court it takes over 200 steps and over two years. Of course, if that is the recourse, what is the motivation to get people to pay on time!?
It really is a crying shame that there are millions of people are wanting to work for £1-£2 per day yet corruption is so institutional investments are skimmed so much from the top down this is never passed down to the workers.
It is true, many countries are crying out for investment, but it is a minefield and high, high risk of economic and political stability. For example, lets say you invest in a new office block on the edge of a growing town. All goes well except the local government now decide *not* to build a tarmac road to that part of town - they embezzled the money themselves ot didn't get the bribes they wanted...
In a nutshell, it is high, high risk.
That is the reason why many are still in the third world. Exports and imports are highly taxed, and of course if you want to get something done in a reasonable amount of time, you need to bribe.
For example, in one African country to get someone to pay you by taking them to court it takes over 200 steps and over two years. Of course, if that is the recourse, what is the motivation to get people to pay on time!?
It really is a crying shame that there are millions of people are wanting to work for £1-£2 per day yet corruption is so institutional investments are skimmed so much from the top down this is never passed down to the workers.
It is true, many countries are crying out for investment, but it is a minefield and high, high risk of economic and political stability. For example, lets say you invest in a new office block on the edge of a growing town. All goes well except the local government now decide *not* to build a tarmac road to that part of town - they embezzled the money themselves ot didn't get the bribes they wanted...
In a nutshell, it is high, high risk.
Come to think of it I found a website where these guys have started a charity where they build schools in Africa.
For about £5000 they built a whole school themselves - no middle men, no corruption, they even had receipts down to literally paint brushes that cost a few pence so every penny given went into it.
Rather than put money in the hands of corrupt officials you may as well give it away to them, at least it is going somewhere useful!
For about £5000 they built a whole school themselves - no middle men, no corruption, they even had receipts down to literally paint brushes that cost a few pence so every penny given went into it.
Rather than put money in the hands of corrupt officials you may as well give it away to them, at least it is going somewhere useful!
There are quite a few African themed funds coming out or in the pipeline stage and it wouldn't surprise me to see a few fingers burnt with them. There is one on the verge of being launched that looks good and has an element of capital protection with potential upside sufficient to make it rather interesting. Feel free to PM me if you want details and have a particular yearning for investment in this region.
JD
JD
Edited by JD247 on Thursday 1st November 15:03
Bullseed said:
Marki said:
Iwould think you would need to be off your rocker to invest in Africa , its a currupt shit hole
Ignorant idiot.
Okay sensible answer not that I'm saying some of those here already aren't.
African markets are illiquid, volatile, and small. The biggest by far is SA.
However Africa is possesed of immense commodity resources from oil, to gold, to well you name it. That's the interest. The raw materials required to industrialise India and China will in part have to come from Africa.
That is an opportunity. Companies operating in the region of any quality/size are few and far between. It's not going to be a story of a continent that will ever ( in our lifetime anyway ) be developed in the way we think of it ( industry, office workers, proper banks etc ).
But there is huge money to be made, and lost.
So it's a speculative opportunity, but not a crazy one.
And yes, I have travelled extensively in Africa. I have exposure through miners and Lonhro right now, but this fund looks very interesting.
SE Asia is a story about harnessing vast human resources for manufacture. Africa is a story about the commodities that will feed those factories in Asia.
My 2p duly added.
African markets are illiquid, volatile, and small. The biggest by far is SA.
However Africa is possesed of immense commodity resources from oil, to gold, to well you name it. That's the interest. The raw materials required to industrialise India and China will in part have to come from Africa.
That is an opportunity. Companies operating in the region of any quality/size are few and far between. It's not going to be a story of a continent that will ever ( in our lifetime anyway ) be developed in the way we think of it ( industry, office workers, proper banks etc ).
But there is huge money to be made, and lost.
So it's a speculative opportunity, but not a crazy one.
And yes, I have travelled extensively in Africa. I have exposure through miners and Lonhro right now, but this fund looks very interesting.
SE Asia is a story about harnessing vast human resources for manufacture. Africa is a story about the commodities that will feed those factories in Asia.
My 2p duly added.
Edited by LeTim on Thursday 1st November 17:36
LeTim said:
SE Asia is a story about harnessing vast human resources for manufacture. Africa is a story about the commodities that will feed those factories in Asia.
If the resources are in Africa, why not build the factories there? There are plenty of people to work there. But as mentioned, perhaps it's too corrupt for factory builders to risk it, and the Far East doubtless has a better work ethic.Simpo Two said:
LeTim said:
SE Asia is a story about harnessing vast human resources for manufacture. Africa is a story about the commodities that will feed those factories in Asia.
If the resources are in Africa, why not build the factories there? There are plenty of people to work there. But as mentioned, perhaps it's too corrupt for factory builders to risk it, and the Far East doubtless has a better work ethic.
ed over once Simpo Two said:
LeTim said:
SE Asia is a story about harnessing vast human resources for manufacture. Africa is a story about the commodities that will feed those factories in Asia.
If the resources are in Africa, why not build the factories there? There are plenty of people to work there. But as mentioned, perhaps it's too corrupt for factory builders to risk it, and the Far East doubtless has a better work ethic.Africa is a long, long, long way from having the social capacity for an organised work force, that's why.
You might be able to ship a smelter of two over there, even a steel mill, but frankly the money is to be made digging up and growing raw materials there. Not making stuff per se.
Edited by LeTim on Friday 2nd November 09:07
LeTim said:
Simpo Two said:
LeTim said:
SE Asia is a story about harnessing vast human resources for manufacture. Africa is a story about the commodities that will feed those factories in Asia.
If the resources are in Africa, why not build the factories there? There are plenty of people to work there. But as mentioned, perhaps it's too corrupt for factory builders to risk it, and the Far East doubtless has a better work ethic.
Interesting thoughts, I personally think there's potential there, chucking a grand into an African fund is something I think i'm prepared to chance, it's not a massive amount to lose (i've lost plenty more than that in Desire Petroleum ) so I'm not affraid of risks where potential is shown.
) so I'm not affraid of risks where potential is shown.thewave said:
Interesting thoughts, I personally think there's potential there, chucking a grand into an African fund is something I think i'm prepared to chance, it's not a massive amount to lose (i've lost plenty more than that in Desire Petroleum ) so I'm not affraid of risks where potential is shown.
Lonhro Plc is one way of doing it. There LSE listed and have alot of diverse exposure to Africa. HTH. ) so I'm not affraid of risks where potential is shown.JustinP1 said:
Come to think of it I found a website where these guys have started a charity where they build schools in Africa.
For about £5000 they built a whole school themselves - no middle men, no corruption, they even had receipts down to literally paint brushes that cost a few pence so every penny given went into it.
Rather than put money in the hands of corrupt officials you may as well give it away to them, at least it is going somewhere useful!
something like this one?For about £5000 they built a whole school themselves - no middle men, no corruption, they even had receipts down to literally paint brushes that cost a few pence so every penny given went into it.
Rather than put money in the hands of corrupt officials you may as well give it away to them, at least it is going somewhere useful!
http://www.saveamillionlives.org/
thewave said:
Interesting thoughts, I personally think there's potential there, chucking a grand into an African fund is something I think i'm prepared to chance, it's not a massive amount to lose (i've lost plenty more than that in Desire Petroleum ) so I'm not affraid of risks where potential is shown.
Quick heads up. Apparently the Hargreaves Landsdown fund supermarket are offering access to the New Star Heart of Africa fund with a minimum investment of £1000 ( as opposed to £12,500 direct ). ) so I'm not affraid of risks where potential is shown.LeTim said:
thewave said:
Interesting thoughts, I personally think there's potential there, chucking a grand into an African fund is something I think i'm prepared to chance, it's not a massive amount to lose (i've lost plenty more than that in Desire Petroleum ) so I'm not affraid of risks where potential is shown.
Quick heads up. Apparently the Hargreaves Landsdown fund supermarket are offering access to the New Star Heart of Africa fund with a minimum investment of £1000 ( as opposed to £12,500 direct ). ) so I'm not affraid of risks where potential is shown.thewave said:
LeTim said:
thewave said:
Interesting thoughts, I personally think there's potential there, chucking a grand into an African fund is something I think i'm prepared to chance, it's not a massive amount to lose (i've lost plenty more than that in Desire Petroleum ) so I'm not affraid of risks where potential is shown.
Quick heads up. Apparently the Hargreaves Landsdown fund supermarket are offering access to the New Star Heart of Africa fund with a minimum investment of £1000 ( as opposed to £12,500 direct ). ) so I'm not affraid of risks where potential is shown.I've been topping up my Treasury and Euro Corporate bond funds lately though, on an expectation of lots more bad news to come and falling interest rates. M&G Real Yield Class A Bond fund has been a very solid performer over the past 6m of ups and downs!
LeTim said:
thewave said:
LeTim said:
thewave said:
Interesting thoughts, I personally think there's potential there, chucking a grand into an African fund is something I think i'm prepared to chance, it's not a massive amount to lose (i've lost plenty more than that in Desire Petroleum ) so I'm not affraid of risks where potential is shown.
Quick heads up. Apparently the Hargreaves Landsdown fund supermarket are offering access to the New Star Heart of Africa fund with a minimum investment of £1000 ( as opposed to £12,500 direct ). ) so I'm not affraid of risks where potential is shown.I've been topping up my Treasury and Euro Corporate bond funds lately though, on an expectation of lots more bad news to come and falling interest rates. M&G Real Yield Class A Bond fund has been a very solid performer over the past 6m of ups and downs!
I'm working in Luanda, Angola at the moment.
The amount of investment here is immense - the numbers of Chinese workers are incredible.
The Chinese have done an "oil for work" deal with the government here and are currently ugrading the water, sewage and road networks with a reasonable amount of success.
There is a lot of corruption here, but much less than in past years.
I'd say it's worth a punt at £1k - in fact if you'd be prepared to PM me some details I'd be grateful.
The amount of investment here is immense - the numbers of Chinese workers are incredible.
The Chinese have done an "oil for work" deal with the government here and are currently ugrading the water, sewage and road networks with a reasonable amount of success.
There is a lot of corruption here, but much less than in past years.
I'd say it's worth a punt at £1k - in fact if you'd be prepared to PM me some details I'd be grateful.
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