According to an FT article, the boutique investment house Exotix argued that African equities are “worth watching this quarter and beyond”, particularly Nigeria. Apparently, Mark Mobius has followers, as we’ve reported some time ago that he’s been recommending stocks in Argentina, Nigeria and Kenya… kinda exotic… but, again, that might explain why his Templeton fund lost23% in 2011 (versus the MSCI Emerging Markets index’s 18% decline).
Exotix note (no wonder its name is “exotic”):
We think the Nigerian market – amid some attractive valuations – is well placed for recovery this year. While we do not expect the external factors to go away quickly, domestic factors should turn supportive. Real GDP growth of 7-8%, and strong non-oil growth, should support corporate profits. Moreover, we think the central bank is closer to the peak in its interest rate cycle.