Glen Washington is the founder of ujuuziHUB, an innovative platform that connects skilled professionals with clients needing a variety of on-demand services across Kenya. With a mission to increase accessibility and convenience for home and business services, ujuuziHUB is designed to empower local professionals by providing them with new opportunities while delivering high-quality services to customers. My background in tech-driven solutions and a deep commitment to creating employment through accessible service networks drive my work with ujuuziHUB and align well with JamiiTrade's focus on impactful trade and service solutions.
Emerging market equities are on a rally. They, however, remain cheap from a relative pricing perspective in comparison to their historic means. At current valuations it seems that the entire market is attractive. A line of thinking that has erased wealth than most others. A long-winded way of saying:
It's a great time to buy the right stocks.
The decline of African capital markets is a serious issue with many causes. The evidence is the declining number of listings and the complete absence of capital raising through stock exchanges. First, high inflation and heavy government borrowing block equity markets growth. This limits private capital investment. Next, the cost of trading shares is high, which stops people from buying and selling as often as they might.
Market structures are also unbalanced. Foreign investors face limits, fx and tax costs are high, and there is too much regulatory interference. These issues lead to low liquidity, so companies have small, narrow groups of shareholders. Poor investor relations practices make things worse because investors don’t get enough information or access to easy cost-effective trading. This lowers overall trust and makes people less likely to invest.
Due to low trading, shares are undervalued, and company-led share buybacks take even more shares off the market. This further limits trading and weakens liquidity.
Finally, many companies decide to de-list, which reduces the number of options for investors. Markets go backwards.
No listings, no capital raising, no investment.
If these structural problems continue, they will hurt the health and future of African public capital markets.
There is an anti-dote, of sorts.