South Africans on new trek into Africa … with investment cash

South Africans are trekking into Africa – this time to stake a claim in fast-growing investment markets south of the Sahara.

Illovo-based Imara S.P. Reid Stockbrokers reports bigger than projected response to the launch of its Africa-wide investment service. The service is designed to open up African equity markets to local retail investors.

The investment channel was originally developed by sister-company Imara Africa Securities to take institutional funds into Africa’s sub-Saharan ‘Frontier Markets’. S.P. Reid has widened the offering to accommodate individual saver-investors who until now have had limited opportunity to buy shares on African stock markets.

Simon Reid, Head of Imara Africa Securities, noted: “Since we opened up African investment to retail clients at the end of June, response has consistently exceeded our projections.

“We process an average of five new investors a day. They see Africa as a growth opportunity and a diversification play.

“Many have decided to ‘follow the money’. They can see South African banks, retailers and telecoms moving into Africa in search of better growth prospects than are available here at home. Big international fund managers and local pension funds are also active participants in these markets.

“Retail investors were denied these opportunities for many years. Now they think ‘if the big players are getting involved, it’s time we got in on the action as well’.”

The new service from Imara S.P. Reid opens up equity and bond investment opportunities across 17 African stock exchanges.

Strong recent gains on several African stock exchanges also excite strong interest.

Simon Reid added: “Some African indices have shown gains well above 20%. Clearly, this focuses attention on the potential for capital gains at a time when many international markets offer lacklustre performance at best.”

New retail clients are not the first to trek into African markets. Even ahead of the launch of the service, some individual saver-investors were eager to commit funds.

“We handled an inflow of R150 million from retail clients on the run-in to the launch as word spread about this unique opportunity,” said Reid.

“Since then, enquiries have not let up. We expect interest to continue.

“Over time, we expect African securities to have an accepted place in a well-diversified portfolio; especially among those who have confidence in the long-term growth of African economies.”