Emerging Markets - Russia or Africa?

T

Thinfield

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Considering taking a punt on a fund investing in Africa (New Star Heart of Africa) or Russia (Neptune Russia and Greater Russia?).
I understand the high risk involved and would only invest a sum I can "afford to lose". Prepared for a long-term gamble.
Where do members see the greatest potential over the next 5+ years?
 
Thinfield said:
Considering taking a punt on a fund investing in Africa (New Star Heart of Africa) or Russia (Neptune Russia and Greater Russia?).
I understand the high risk involved and would only invest a sum I can "afford to lose". Prepared for a long-term gamble.
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Hi Thinfield,
I am not sure about Africa, but Russia is definetely good opportunity
to invest in, particulary in the power energy companies, at the moment
an ordinary electricity bill in Russia is 4 times less than in Ireland,
saying you are prepared for 5+ years long-term investment period there
is a real potential to rise investment money from 100 up to 400 %.
Good luck in investing !
Nicky
 
Thanks Nicky - I am leaning towards Russia. I believe it is enjoying a period of relative political stability and may not be unduly affected by the credit crunch.
I am sure Africas day will come but recent events in Kenya underlined how unpredictable it remains.
 
Thinfield said:
Thanks Nicky - I am leaning towards Russia. I believe it is enjoying a period of relative political stability and may not be unduly affected by the credit crunch.
I am sure Africas day will come but recent events in Kenya underlined how unpredictable it remains.
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Wrong country. Africa is were the action is, especially the central countries with high commodity levels and now low debt. Not all countries in this huge continent are basket cases. But because of the stigma, it is viewed this way. Corruption and GDP growth are very impressive in many of its stable economies within the central belt again. Why buy into the ceiling when you can buy in at floor level in another market. Sizeable smart money is flowing into Africa but you need to be careful and know which as markets, as liquidity is lower.
 
MichaelDes said:
Africa is were the action is, especially the central countries with high commodity levels and now low debt.
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But are they overly dependent on commodities which, by and large, have been on an extended bull run for some time now?
 
I would stay away from an economy run by an increasingly authoritarian demi-dictator. Who knows what he'll nationalise next?
 
CCOVICH said:
But are they overly dependent on commodities which, by and large, have been on an extended bull run for some time now?
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Very true but oil, gold, silver, zinc, steel, diamonds etc etc have serious legs yet. Especially the former commodity oil, it is a diminishing resource. China has guaranteed to buy all and various commodity supply for the next 20 years and has invested tens of billions into these various countries infrastructure. Which is another way of a bribe? America is fuming at their cheek, more so for not thinking of it themselves. The African companies or countries to consider are at floor level. The continent is hugely greater than Europe in size and the general comment by Sherman, is like saying for instance of Asia, that Asia is a bad location to buy due to North Korea, whilst it’s neighbour is Japan!

Not all countries should be tarred with the same brush. Up until recently the city wrote off the whole of Africa on this basis but not any more, they smell value and profits to be made through corporate deals. Like what happened in the Korean or Vietnamese economies in 2007, IMO certain African stocks if picked correctly in a managed fund or otherwise will equally spike during 2008.

Africa has glimmers of light with a creditor of China, willing to pay on time, for market price for years to come. Therefore these certain (i) economies or (ii) sectors within economies or (iii) companies, are open to realistic speculation of high capital appreciation – Medium risk to High Risk, same as Russia IMO but with better growth potential. Personally I would stick with one of the new African managed funds that tracks these issues. Specialist funds like this are based in London. As stated again, I do not work nor ever have in financial services.
 
MichaelDes said:
The continent is hugely greater than Europe in size and the general comment by Sherman, is like saying for instance of Asia, that Asia is a bad location to buy due to North Korea, whilst it’s neighbour is Japan!
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Michael, I was talking about Russia.
 
I'd go for Russia, in it for 12 mths now and returns are fairly good. Africa is a real chance, really high risk. Why don't you try for both?? [broken link removed]
 
RugbyBoy - I was considering using Hargreaves Lansdown. I have not used them before but they do seem to have a reasonable reputation.
 
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Definetely Russia and investing in Power Electricity companies, the potential is up 3-4 times for 3-4 years long-term investing
 
russia is an energy play so why not just oil etf much cheaper! also the levels of corporate governance and the unfriendly shareholders rights leave a lot to be desired... yukos a case in point..

the largest private investor in russia Hermitage Capital is currently banned from russia for ****ing the ceos of a number of their bigger semi states..

brazil is a better bet than the two!
 
Michael, as per you comments above, I've been thinking about Africa myself for a while but to be honest haven't really found any fund that really caught my eye.
Is there any particular fund / funds you would recommend?
Or is there any particular fund manger who speicalises in Africa?
Thanks
 
I think it requires alot more research, the right african country is probably the safer bet, russia is becoming more authoritarian and powerful and does not need western money as much as africa does, Warren buffet was trying to decide between investing in russia or china in 2004 eventually he decided on china and invested in petro china because he had more confidence the chinese would stick by their word a week later putin nationalised lukos and threw the ceo (begins with K) in prison.
 
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