Africa's Stock Exchanges

Here's a tv piece I worked on during my recent time in South Africa ...



Scratches at the surface in image and parts of an interesting interview some of the challenges of dual speed in Africa's economic growth (stock market gains vs. jobs) but was still considerably trimmed for issue at Voice of America.

My longer original script ...

A recent youth-led protest in South Africa targeted the continent’s oldest and largest stock exchange, the Johannesburg Stock Exchange, founded in 1887.

At this protest, as at many others he has led, youth leader Julius Malema, who is currently facing expulsion from the ruling African National Congress, denounced the country’s economic system. He called for more nationalizations in key industries for a better redistribution of wealth.

Several times, when he has made such pronouncements, stocks on the JSE, as it is known, have dropped precipitously.

Noah Greenhill, the stock exchange’s head of marketing and business development, sees such patterns more as a strength than a weakness.

“I do not understand why we get upset when somebody says something. He is allowed to say it. It might not be policy, I agree. It might be that he represents a constituency. But we do not look in the mirror. The United States have people saying stuff that is vehemently against what the president of the party of the day says and nobody goes, well, we cannot invest in America because so and so is vehemently opposed to what is being said by the ruling party and our president.”


Besides the threat of political instability, African stock exchanges have also recently suffered losses due to weakening currencies and difficulties in sustaining outside investment in a tough world economic climate.

More and more African companies are turning to western stock markets to be listed there, especially in London, rather than on a stock exchange in Africa.

Economists say there also may be too many national stock exchanges on the continent, with about two dozen currently operating in sub-Saharan Africa. Some of these exchanges have been hampered in attracting investors due to insufficient hours of trading and slow service.

A pan-Africa integration of stock markets has been talked about for years, with little progress. Regional models of integration are seen as more appealing, such as the West African regional stock exchange which already operates out of Ivory Coast.

Despite some of these shortcomings, with so many natural resources coming out of Africa, as well as booming infrastructure projects and a growing consumer markets, Greenhill says it would be a mistake for investors to ignore Africa.

“It is the land of opportunity. Look at the telecommunication companies. Look at the banking services, retail, those kinds of businesses have huge opportunities here. Make no mistake, there are risks, but there are risks in doing business in Greece, in Portugal, in Italy, in Ireland, in Spain. The reality is there are risks doing business in China.”


The fastest growing economy in the world this year has been Africa’s latest oil producer, Ghana, with year-end growth rates expected to top at least 13 percent.

At stock exchanges across Africa, investors are hoping this type of economic success will also mean higher and higher stock returns.

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