27four Investment Managers
10th October 2014
Africa: A destination for long-term growth investments
The African region has benefited from increased investment flows on the conventional side which as a result have simultaneously boosted demand and created a surge in appetite for Shariah compliant investment products across the continent. With several dedicated Shariah compliant investment houses, Africa is expected to bear strong growth prospects over the long-term. NABILAH ANNUAR takes a look at the continents investment landscape and potential opportunities. Gradually being recognized by global investors as an exciting destination, Africa has been suggested to show positive developments similar to the rise of the Asian tiger economies in the 1970s and 1980s. Nadir Thorkan, an investment analyst at 27four, a South African (SA) investment firm, revealed that excluding SA, Africa is increasingly being recognized by global investors as an exciting, long-term growth investment destination. Over the last decade, most key African countries have enjoyed economic growth in excess of 6% per annum more than twice the average growth rate of South Africa and over the next years, nine out of the top 20 fastest growing economies in the world are expected to be in Africa, he said. Shariah compliant assets available in the African investment space include: (1) Equities which are subjected to the regular Shariah compliant financial screens as set out by AAOIFI; (2) Sukuk following issuances from Senegal and South Africa, Nigeria and Kenya are also expected to launch their Sukuk in the near future; (3) Commodity exchange traded funds (ETFs), in particular precious metal commodity ETFs listed on the Johannesburg Stock Exchange; (4) Murabahah contracts; (5) Selected private equity. According to Nadir, the most easily accessible asset class remains Shariah compliant equities as these have the largest universe eligible for selection and are also the most liquid asset class.
Read the full article from Islamic Finance News HERE.