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GCC centres look to tap into Africa
08 January 2013
The promise of strong returns is expected to create a flow of investment into Africa, with Middle Eastern financial centres hoping to leverage their proximity and market knowledge, writes Paul Golden
The latest African Economic Outlook report predicted growth of 4.5% across the continent for 2012, increasing to 4.8% during 2013 as the economies of the northern countries recover from the impact of the Arab uprisings.
The Institute of International Finance’s first African regional report, published in November, observed that African capital markets have become more open and, together with better governance, this has facilitated a rise in portfolio investment, adding that foreign investors have tended to focus more on bonds than equities.
Fixed income activity has been particularly strong this year, as foreign funds positioned themselves ahead of South Africa’s inclusion in Citigroup’s World Government Bond Index and Nigeria’s entry into the JPMorgan GBI-EM bond index.
The experiences of Shuaa Capital highlight the challenges that faced investors in the recent past. “We don’t invest in sub- Saharan Africa,” explains the bank’s head of asset...
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