Investec eyeing Angola stock exchange launch

Investec Asset Management would be interested to invest in Angola once the country’s stock exchange launches.

Roelof Horne

Roelof Horne

“We have been waiting for the launch of the stock exchange for the last few years,” says Roelof Horne, portfolio manager of Investec’s Pan Africa Fund. The fund invests mainly in equities listed on stock exchanges across Africa.

“Three years ago I was actually in the stock exchange building. I met the manager of the stock exchange; I met their IT people. They have trading systems; they have stock brokers. Everyone was sitting waiting for the president to sign but for some reason they have decided not to press the button,” says Horne.

Some stakeholders expect the Angolan bourse – the Bolsa de Valores e Derivativos de Angola – to open later this year or in early 2011.

Angola came out of their civil war less than a decade ago. The country is tightly controlled by a political elite who are dictating the time table for economic reform. But economic reform is underway and gathering pace. We believe Angola will move into the mainstream,” says Horne.

According to the IMF, Angola’s real GDP growth from 2004 to 2008 was consistently above 10%, recording a high of 20.6% in 2005. In 2009 the country was, however, hard-hit by the global economic crisis and only managed to squeeze out an estimated growth of 0.7%. The government recently projected growth of between 5% and 6% for 2010.

Horne says that Angola holds significant investment potential. “GDP growth was bad last year because of what happened to the oil price as a result of the global financial crisis. But in the few years before that, you had GDP growth measuring in the twenties. When you have fast growth coming off a low base, opportunities for businesses abound.”

“Angola has a huge deficit of development. Luanda’s population has mushroomed but with no infrastructure, so there the opportunities are obvious.

“You also have a fertile country, where there’s just about no agriculture. You have a country that has got huge mining potential but is very underexplored. Angola is relatively well-off because of its oil wealth yet they import everything. Just about nothing gets manufactured in Angola. With the right policies the development in the country is going to be astronomical over the next few years,” he explains.