The stock markets are one of the lifebloods of economic development without which, it's hard for any nation to reach its full potential. While Africa still has a long way to go, it has made some promising strides in developing its stock markets.
Currently, there are only about 16 African bourses. The region's stock-market capitalization as a percentage of gross domestic product (GDP) is less than 30% . Liquidity is a pressing problem.
At the Uganda Securities Exchange in Kampala, just nine companies are listed with an average daily volume of merely over US$200,000.
However, there are some African nations like in Nairobi, Kenya wherein stock exchange transactions are very active. The country's biggest mobile-phone service provider Safaricom, raised a whopping US$800-million last June 2008 in an initial public offering (IPO) that was heavily oversubscribed. Also, Celtel Zambia raised US$200-million in the same month last year.
As a result, Nairobi stock market was up by about 5% last year as against double-digit plunges in the United States and Europe, and it turns out, Kenya has been a much better place to park investments in this period of market turmoil than the Dow Jones.
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4 comments:
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