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New and Exciting African Stocks from Mozambique (Part 1)

1 November 2007 - Features - Editor

South Africa, Egypt, Nigeria, and Kenya are the most prominent countries in which international investors consider holding stocks: South Africa has a well-deserved lead in the matter. Zimbabwe has become notorious for a hopeless economic situation, and the mass of this continent has little room in the heady world of stocks. Do all the neglected countries of Africa deserve lack of investment support in equal measures? Are all of them in desperate straits with intractable problems? One does not have to be altruistic in asking such answers, because some interesting opportunities to invest in stocks with potentials can be uncovered by factual answers.

Do you know that Mozambique is one of the world’s fastest growing economies? The situation is even more impressive when we consider the colonial exploitation, civil wars, and natural disasters which the country has suffered for decades. You must be a supporter of free enterprise if you invest in stocks, so it is cheering to know that Mozambique has become a multi-party democracy, with broad political consensus on moving away from the pitfalls of socialism to a professional development of the economy. The present executive head of state is an accomplished entrepreneur in his own right.

Though Mozambique’s present exports are largely from its coast line and from the agrarian hinterland, it has significant natural resources of titanium, tantalum, graphite, and natural gas coal, titanium, natural gas, hydropower, tantalum, graphite. The government has encouraging plans to develop national infrastructure. All this is not to hide the staggering social problems that Mozambique still faces, and its vulnerability to the vagaries of nature, but to suggest that the investor-world should start considering stocks in Mozambique seriously.

Routes to Mozambique Stocks

Exchanges at Lisbon and Johannesburg have joined hands with the World Bank to help Mozambique establish the Maputo Stock Exchange. The present government has inherited a garland of some 900 companies, in diverse lines of enterprise, from the earlier socialist era. 80% of the stocks of this sector are now available for private investors. This is an especially interesting opportunity for companies listed and operating in South Africa, because they are best positioned to leverage the potentials of Mozambique for mutual benefits. This democratic neighbor can help South African companies expand their revenues with just marginal increases in costs.

Capital of just $1.5 million suffices to list a new company on the Maputo Stock Market, so some entrepreneurs from other countries may prefer to form new corporations rather than pay for part ownership of former government organizations. The government is seized of this issue, and wishes to facilitate the establishment of green field projects. That is why a transparent and orderly process exists to form new corporate entities in Mozambique. The process costs very little and can be completed in a month.

New and Exciting African Stocks from Mozambique (Part 2)

 


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