Archive for May, 2012

Africa: Investing in the Cradle of Civilization: Part 1

May 5, 2012 Leave a comment

Africa is widely regarded as the cradle of civilization. Building on its storied history as the bedrock for humankind, Africa is also a continent of ample investment opportunity, provided you have the resolve to be in it for the long haul.

My team and I look at Africa as two parts: (1) sub-Saharan Africa where South Africa and Nigeria dominate and (2) the North African markets, where Egypt is the largest. Of course the South African market is much larger and more developed than the other markets in sub-Saharan Africa.  

We have been looking at a number of markets on the African continent, several of which have been developing quite rapidly, though they have a long way to go before their potential can be fully realized.

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Categories: Perspective

China’s Landing Pattern

May 1, 2012 Leave a comment

While it’s still considered an emerging economy, there’s no doubt China has held a good deal of influence over the global markets. Analysts and economists seem to wait with bated breath for any piece of data that confirms or denies whether the country—regarded by many as a global growth engine—is set to keep on humming or if it has begun to sputter. I’ve said many times that my long-term outlook for China remains positive, but it is true that this year we have seen some evidence of slowing in areas of China’s economy such as manufacturing, housing and exports. So the question on everybody’s mind is: Will China have a soft or hard landing?

My view is: China may not be landing at all. How can we talk about a hard or even a soft landing when growth in China is expected to be 7.5% in 2012?1 A hard landing typically is viewed as a rapid slide into recession. I don’t see that happening here. A soft landing would be considered a decline in growth to 2% or 3% which again, is not in the cards. Some economists have used the hard and soft landing terms without defining what they mean. The World Bank seems to define a gradual slowing of growth as “soft landing”2 but a decline of growth from 8% to 7%, or from 10% to 8%, does not seem like a “landing” at all.

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Categories: Perspective