Musings on Africa, Politics, Technology, Love, Life and Trifles...

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jeudi, juin 19, 2008

Quick hits : rare metals, water, Africa is the new frontier

  • Rare metals - mainly from Africa - soar on demand for efficient jets (Financial Times).
    The airline industry’s fight for survival in the face of soaring oil prices has triggered a massive jump in the price of a number of obscure and scarce metals that are used to improve the fuel economy of jet engines. [...] Chromium, produced mainly in South Africa, has also benefited from the desire for fuel-efficient engines. Its price has jumped this month to a record of $11,000 per tonne, up from about $6,800 last year and less than $4,000 in 2000. The price of cobalt, which comes predominantly from the Democratic Republic of Congo, rose earlier this year to $52.50 per pound, double its 2006 level and the highest price since at least 1978.

  • Go to Africa, Young Investor by Paul Kedrosky - Infectious greed
  • The number of armed conflicts in Africa has dropped from 20 in 1999 to 5 today. Granted, that's non-zero, and the human losses in the remaining fighting is horrific and unacceptable, but there is significant and largely unheralded change.
  • Real GDP growth in sub-Saharan Africa (SSA) averaged 4.1% from 1997-2002, and has since risen to 6.6%
  • Real incomes are rising, with GDP per capita hitting 4.6% in SSA in 2007.
  • Africa has lower inflation, higher FX reserves, and more FDI than did Asian emerging markets in 1980 -- and that worked out okay.
  • We're seeing bond duration extension, with government bond yield curves now stretching out to 10- and 15-years in some countries, which is a boon to project financing.

    The obvious question, of course: How do you track and invest in African markets? The fast answer is, it isn't yet as easy as it should be. Yes, there are some frontier markets ETFs, including the just-launched Claymore/BNY Mellon Frontier Markets ETF, or the SSGA Emerging Middle East and Africa ETF, but they all skew heavily toward Eastern Europe and the Middle East, allocating precious little to continental Africa (outside South Africa, which hardly qualifies as a frontier market). Nevertheless, there is a race into frontier markets in general this year, and into Africa in particular.

  • Water is the new oil by Business Week.
In the coming decades, as growing numbers of people live in urban areas and climate change makes some regions much more prone to drought, water—or what many are calling "blue gold"—will become an increasingly scarce resource.