Investment Basics XLIV: Review of African stock markets

Chipo Mlambo and Nicholas Biekpe

MPRA Paper from University Library of Munich, Germany

Abstract: African stock markets have rapidly increased in number since 1989. This rapid increase came with the efforts to privatise state-owned enterprises. African markets are still young and segmented and lack contagion with global emerging markets. Expected returns are quite high on African stock markets making them attractive to international investors. However, African markets are also characterised by poor liquidity and market inefficiency. This, coupled with unfavourable laws and regulations, political instability, foreign exchange and convertibility risk, taxation, limited share acquisitions and restrictions on foreign portfolio investment have constrained the growth of these markets. Relaxing or eliminating investment restrictions will promote foreign portfolio investments resulting in improved liquidity and efficiency. This will give African stock markets increased growth potential and enhance their role in economic growth.

Keywords: market efficiency; African stock markets; liquidity (search for similar items in EconPapers)
JEL-codes: G1 G11 (search for similar items in EconPapers)
Date: 2001-10, Revised 2001-12
References: View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Published in Investment Analysts Journal 5.54(2001): pp. 61-65

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