Good Evening
Good Evening

Africa is rich in investment opportunities

NAIROBI, Kenya -- The barrage of hourly tweets sent out by Aly-Khan Satchu -- East Africa's version of CNBC's "Mad Money" host Jim Cramer -- cheers on what Satchu says is a growing sentiment among investors: If you're not investing in Africa, you should be. Or as Satchu loudly proclaims on his Twitter feed or newspaper column: "ITS BOOM TOWN BABY."

Several African stock markets are seeing huge returns this year. Though small, Ghana's stock market is up more than 50 percent so far in 2013, one of the world's top performers. Kenya -- up 35 percent -- has been touching record highs all year. Nigeria is also up 35 percent on the year.

When Rwanda offered $400 million in 10-year dollar-denominated bonds last month, demand was more than eight times the supply.

"You have to look at the returns if you're going to be a serious investor. And right now Africa is flashing across everyone's tape," Satchu said.

"The golden flood of free money that Ben Bernanke has launched on the world, usually it would stop short of Africa," said Satchu, who once ran the global trading desks in emerging markets for Credit Suisse First Boston and now runs his own financial management business in Nairobi.

With U.S. treasuries now paying so little, investors are putting money in Africa, he said.

Rwandan President Paul Kagame, writing in The Wall Street Journal following his country's wildly popular bond offering, noted nine of the world's 15 fastest-growing economies are in Africa. Foreign direct investment was $9 billion in 2000; last year it exceeded $80 billion, he wrote.

Despite the increased investment and rising stock indexes, investors must still wade into Africa carefully. It's not the homogeneous investment environment the United States or India is, Satchu said.

"Would I throw my life savings into the DRC?" he said, referring to the violent but mineral-rich Democratic Republic of the Congo. "You must be joking. But would I make a big bet on some real estate here [in Kenya] where the title is clear? Yes."

More news