‘Exceptional time’ to invest in African stock exchanges: Investec

Foreign investors may have pulled back from many African exchanges, but shares are "stupidly cheap", and "it’s an exceptional time to invest into African stock exchanges", according to Investec Securities.

Investec is a South African international banking and wealth management group headquartered in Johannesburg.

“It’s an exceptional time to invest into African stock exchanges,” said Andrew Schultz, head of frontier markets at Investec Securities, at a conference in London on 10 October.

“Shares are stupidly cheap,” he said. “There are very good companies with strong management teams, who have proved they are very good at making the most of a tough situation.”

Schultz was speaking on a panel during “AFSIC 2022 – Investing in Africa”, a giant annual conference focused on investment flows into Africa bringing together investors, fund managers and entrepreneurs from Africa, the UK, Europe and the US.

Schultz said that, over the last 10 years, leading African companies outside South Africa have doubled their earnings but fallen from a valuation (PE ratio) of 13 times earnings to only 10 times earnings.

Samuel Mokorosi, head of deals and origination for the Johannesburg Stock Exchange, said: “In Q1 2022, with war in Ukraine, foreign interest was coming into the market.

Mokorosi said the JSE sees good appetite for infrastructure, green, social and sustainability-linked bonds, of which Netcare listed the first in March 2022.

Source: African Business

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