Monthly Finance & Infrastructure Update: November
In the latest Reuters global asset poll, it showed that the majority of investors are optimistically expecting shares to keep rising. Current stretched equity evaluations have not yet caused enough concern to change the overall market direction.
The world’s broadest equity gauge – the MSCI all-country index –finished November with its 13th straight monthly gain, the longest winning streak in the index’s 30-year history.
Due to cryptocurrency hype in the news earlier in the month, Bitcoin dropped $1,000 to a low of $9,250, before skyrocketing this week, surging above $14 000, extending this month’s advance to more than 40%. The price of the cryptocurrency touched $14 399.99, a new record, according to Bloomberg pricing.
This month, the US dollar increased to 112.25 yen and managed to hold its ground versus the Euro but fell to a two-month low of $1.3480 to the pound. Measured against major peers the dollar is headed for biggest monthly drop since July.
Naspers, one of the world’s largest investors in e-commerce ventures, is looking to invest and continues its search for e-commerce and tech investments. CEO, Bob Van Dijk mentioned in an interview that the company has several billion in cash and underutilised credit facilities and is currently in a heavy investment cycle and spending money on building substance in emerging market e-commerce and other online businesses.
Pension funds tend to lend themselves to investment in infrastructure projects due to the length of their term. Although they aren’t as easy to move around, growing interest in infrastructure investment among pension funds in developed markets sits around 2 – 3%. Many local pension funds don’t have the necessary exposure to infrastructure options, with the South Africa Pension Funds Act allowing up to 15% of retirements funds assets to be invested alternatively in other classes, private equity included.
The South African retirement industry today manages assets of around R1.8-trillion. This excludes the Government Employees Pension Fund (GEPF) with assets under management of more than R1.6-trillion. The GEPF remains “over-exposed” to the South African economy with close to R500-billion in local bonds issued by the government and state-owned entities.
Infrastructure Focus| Africa
Governments’ largest infrastructure developers
According to the 2017 edition of Deloitte’s “Africa Construction Trends’ report, governments still remain the single largest developers of infrastructure projects across Africa, owning between 57% and 90% of tracked projects. This was based on 303 infrastructure projects valued at more than US $50-million beginning construction since June the 1st.
Airfield Capacity a challenge for the future
Airport capacity and demand for airlines to access airports are not able to keep up with each other, creating a possible future concern if measures are not put into place soon. It is estimated that over the next two decades, passengers are expected to double to 7.2 billion with the number of aircrafts in operation expected to double too. There is also said to be a 70% growth in cargo aircrafts. Such massive expansion in the airfield could potentially cause major challenges.
Africa needs energy to grow
There are still over 600-million Africans who do not have access to power. Without this kind of infrastructure in place, sustainable growth will be difficult to achieve. The continent is looking to Public private partnerships as well as alternative energy sources such as hydro resources to positively impact this situation, with the potential of the African continent producing over 283 gigawatts of energy.
UAE shows interest keen interest in African continent.
UAE governments have shown interest in a wide range of initiatives aimed at promoting trade with Africa. Seeing the growth in the markets and major demand for goods and services is creating the need to connect business communities. Abdullah al-Saleh, the undersecretary for foreign trade and industry at the UAE ministry named Kenya, Ethiopia, Tanzania, Namibia, Angola, Mozambique and Nigeria as being of particular interest.
Infrastructure News| Kenya
The construction of Kenya’s US $600 Million road is to begin soon with the 530km Lamu-Garissa-Isiolo road assisting to develop ten towns that are along the corridor as well as aid the transport of cargo from the Lamu port.
Infrastructure News| Zimbabwe
Local Government, Public Works and National Housing Minister Saviour Kasukuwere and his Transport and Infrastructure Development counterpart Dr Jorum Gumbo yesterday toured the site of the new city to be constructed in Mt Hampden in Zimbabwe where roads leading to the new Parliament building are to be constructed.
Infrastructure Company News| Barclays
Barclays Africa Group Limited and China Development Bank have signed a memorandum of understanding (MoU) aimed at strengthening cooperation and exploring opportunities to fund development projects in Africa. Barclays Africa aims to leverage the MOU to unlock opportunities to strengthen its contribution towards Africa’s development and economic growth.