Gold Finance

2010-02-10T21:55:00.000Z

Stock Market Fluctuations

2007-05-26T18:14:00.000+01:00

The economic health of a country will strongly influence its stock market. When the economy is doing well the market is bullish. Bull markets occur during times of high economic production, low unemployment and low inflation. Bear markets, on the other hand, follow downturns in the economy. When inflation and unemployment are rising, stock prices are usually falling.
Stock price fluctuations are also driven by supply and demand, which in turn are dependent to a great degree on investor psychology. Seeing a stock price rise rapidly can cause investors to jump on the bandwagon, and this rush to buy drives the price up even faster. A falling price can have a similar effect in the other direction. These are short-term fluctuations. Stock prices tend to normalize after such runs.
The stock exchange is only 1 of many opportunities for people to invest. Other popular markets include the Foreign Exchange Market (FOREX), the Futures Market, and the Options Market.

FOREX: World's Largest Market

The FOREX is the biggest (in terms of value) investment market in the world. FOREX traders buy 1 currency against another and can profit from small changes in currency value. Most FOREX trades are entered and exited in 1 24-hour span, and traders have to keep a close watch on the market in order to make profitable trades.

The Futures Market

The Futures Market is a market of contracts to buy and sell certain goods at specified prices and times. It exists because buyers and sellers of goods wish to lock in prices for future delivery, but market conditions can make the actual futures contract fluctuate considerably in value.
Most investors in the futures market are not interested in the actual goods -- only in the profit that can be realized from trading the contracts.

The Options Market

The Options Market is similar to the Futures Market in that an option is a contract that gives you the right (but not the obligation) to trade a stock at a certain price before a specified date. These options can be traded on their own or purchased as a form of insurance against price fluctuations within a certain time frame.

Stocks: Low Risk, Long-Term

All 3 of these markets are considered quite risky without considerable knowledge and experience. They also require close monitoring of market movements. Stocks, on the other hand, are less risky because movements of the market are usually more gradual. Although short-term investment strategies are possible, most people view stocks as long-term investments.

Ripped off

2007-05-11T21:52:00.000+01:00

Africa is being ripped off to the tune of some $500m a year simply for hooking up to the World Wide Web.And this extra cost is partly to blame for slowing the spread of the internet in Africa and helping sustain the digital divide, they contend.The continent is being forced by Western companies to pay the full cost of connecting to worldwide networks.This has led to the unfair exploitation of the continent's young internet industry.The problem is that International Telecommunications Union regulations,which ensures the costs of telephone calls between Africa and the West are split 50:50, are not being enforced with regard to the internet."British Telecom doesn't spend one single penny... America Online doesn't spend one single cent in sending emails to Africa."The total cost of any email sent or received by an African internet user is borne entirely by African ISPs.Despite the relatively high cost of using the internet in Africa, growth has been rapid in recent years.All 54 countries are now hooked up to the internet, and there an estimated four million subscribers across the continent.In Kenya alone, there are more than 100,000 subscribers and some 250 cyber cafes across the country.The current and latent demand for bandwidth in Africa cost about $1bn per year.If data network operators in the West were forced to adhere to the same regulations as voice operators then they would have to pay half the cost."The only reason this doesn't happen at the moment is that European and North American operators are not prepared to pay their share of the costs."This is exploitation... These networks are raping Africa of half a billion dollars a year."The G8 group of leading nations are responsible for this inequitable trade and at some point had to act to halt it, if they were serious about trying to bridge the digital divide.African countries are taking action by getting together to reduce their costs.A proposal called the Halfway Proposition urges fellow African countries to create national exchanges and then interconnected regional ones as has occured in other parts of the developing world.This would at least mean that the communications costs for intra-African emails stay within Africa,rather than the West benefiting from the cost of an email."No one really knows how much intra-African traffic there is, but it's sure to grow and become significant if it isn't already".If only 5% is intra-regional, it would add up to a sizeable amount.

A common mistake in investing

2007-05-05T00:47:00.000+01:00

With the advent of online banking and online trading, the stock market has opened its doors to virtually every person willing enough to grow their money.
And yet, despite this, not everyone has joined the bandwagon. The biggest factor being the potential risk involved in trading stocks. The stock market is among the most volatile financial institutions in business. And it’s this volatility that tends to be the biggest problem with the stock market.
Almost any reason, real or imagined can cause these extreme fluctuations that often affect the stock market’s credibility. Real factors such as the weather, political instability, political decisions, war, terrorist threats, boycotts and strikes, economic trends and international trade or even company scandals also become factors to the stock market problems.
Bad weather such as hurricanes affects certain industries such as oil production. This then drives the cost of petroleum products higher as production gets limited. This causes a cascading effect that drives stocks of oil companies higher.
Political instability in a country can affect investor confidence thus lesser investing is done. This causes the shares of local companies to slide downwards. Boycotts, strikers and terrorist threats have also proven to be the bane of the airline industry.
Shares of airliners have tumbled throughout the years with every terrorist attacks all over the world. But aside from uncontrollable factors such as natural disaster (or war), the common underlying link that allows these other reasons to affect the stock market so significantly is investor psychology.
Humans are prone to herd mentality. Often, people confirm with the actions and directions of other people. This is a common mistake in investing. An example of this is during the early 90s when dozens of dot com companies sold their stocks in the stock market. It created an artificial demand for stocks of companies that did not even provide real and concrete services.
These stocks soared in value as more and more enthusiastic investors bought them. This happened up until the time it was realized that these companies did not actually post any considerable profit to sustain the value of the shares. The stocks then tumbled and virtually lost value as investors frantically sold their shares.
This tendency to panic and depend on the direction of others is among the real causes of problems with the stock market.
There are two actions arising from this mentality:
a.) panic buying b.) panic selling
Of the two, panic selling causes the most harm since it causes a steep and quick drop in the value of shares. The best way to avoid causing these problems is to practice due diligence and to keep a level head while investing.

Gateway to Africa

2007-05-02T09:50:00.000+01:00

South Africa has the resident marketing skills and distribution channels imperative for commercial ventures into Africa.South Africa is among the top 30 countries in the world for ease of doing business, according to a 2005 World Bank report. The finding suggests that South Africa is making progress in creating an environment conducive to investment, which the government has identified as key to achieving a 6% growth rate.
The survey ranked 155 countries according to the number of procedures, time and costs involved in: starting a business; dealing with licences; hiring and firing workers; registering property; getting credit; protection for investors; paying taxes; trading across borders; enforcing contracts; and closing a business.
South Africa ranked 28th, ahead Spain (ranked at 30), Austria (32), France (44), Russia (79), China (91) and Brazil (119). Overall, SA had the highest ease-of-business ranking on the African continent.South Africa's industrial production growth is well above the average for developing markets.
The country's manufacturing output is becoming increasingly technology-intensive, with high-tech manufacturing sectors - such as machinery, scientific equipment and motor vehicles - enjoying a growing share of total manufacturing output since 1994.
SA's technological research and quality standards are world-renowned. The country has developed a number of leading technologies, particularly in the fields of energy and fuels, steel production, deep-level mining, telecommunications and information technology.

Trading stocks in Africa

2007-05-01T19:00:00.000+01:00

Experienced african stock traders and investors recognize that trading stocks with momentum is among the fastest & most effective ways to harvest BIG piles of cash in the stock market. Why? Because certain stocks with momentum bring the posibility of gaining as much as 100% on the same trading day. Some may only rise 10% on a few minutes. The problem is that if you don't know what stocks to look for and how to approach them while limiting your risk, you won't even get close to making some profits. You don't necessarily have to trade momentum hot stocks all the time. But you can learn how to take advantage of them when you encounter the best opportunities while at the same time limiting your risk.

West African Economic and Monetary Union

2007-05-01T13:17:00.000+01:00

The West African Economic and Monetary Union (or UEMOA from its name in French, Union économique et monétaire ouest-africaine) is an organization of states of West Africa established to promote economic integration among countries that share a common currency, the CFA franc.
UEMOA was created by a Treaty signed at Dakar, Senegal, on January 10, 1994 by the Heads of State and Government of Benin, Burkina Faso, Côte d’Ivoire, Mali, Niger, Senegal, and Togo. On May 2, 1997, Guinea-Bissau became its eighth member state.
UEMOA is a customs union and monetary union between some of the members of Economic Community of West African States (ECOWAS). Its objectives are
Greater economic competitiveness, through open and competitive markets, along with the rationalization and harmonization of the legal environment
The convergence of macroeconomic policies and indicators
The creation of a common market
The coordination of sectoral policies
The harmonization of fiscal policies
In terms of its achievements, UEMOA members have implemented macroeconomic convergence criteria and an effective surveillance mechanism; have adopted a customs union and common external tariff (early 2000); have harmonized indirect taxation regulations; and have initiated regional structural and sectoral policies. A September 2002 IMF survey cited the UEMOA as "the furthest along the path toward integration" of all the regional groupings in Africa.
ECOWAS and UEMOA have developed a common program of action on trade liberalization and macroeconomic policy convergence. ECOWAS and UEMOA have also agreed on common rules of origin to enhance trade, and ECOWAS has agreed to adopt UEMOA’s customs declaration forms and compensation mechanisms.

Members
Benin (1994)
Burkina Faso (1994)
Côte d’Ivoire (1994)
Guinea-Bissau (On May 2, 1997)
Mali (1994)
Niger (1994)
Senegal (1994)
Togo (1994)

The Angolan Stock Exchange

2007-04-19T23:04:00.000+01:00

Angola is one of the few countries in the Southern African region that still does not have its own stock market, despite the fact that the country is turning into one of the main economies of the region. The government of Angola has announced its plans to fast-track the planned opening of its Stock Exchange.The bourse is expected to boost investments in the country.
The Angolan Stock Exchange (BVA) will likely be launched in the third trimester of this year with ten listed companies and an initial capitalisation of more than US$ 6 billion, according to the Angolan Industry Ministry's coordinator of the Centre for Capital Markets, António Cruz Lima. The BVA will be located in Luanda, the political and economic capital of Angola.

According to Mr Cruz Lima, the Luanda government can expect to collect about US$ 940 million in taxes from stock market activities. Collecting Angola's main companies on the Luanda bourse will also give the international finance market improved possibilities of investing in Angola.

Of the 14 countries that comprise the Southern African Development Community (SADC) Angola is one of only three countries that does not have an institutionalised stock market. The other two SADC countries without a stock exchange are Tanzania and Congo Kinshasa (DRC), both minor economies compared to Angola.

While Angola is a deeply impoverished country following 27 years of civil war, its economy is rapidly growing powerful. Angola is sub-Saharan Africa's second largest oil producer - after Nigeria - and international and Angolan oil companies are currently scrambling for the rich undiscovered oil reserves offshore and in the Cabinda province. Further, Angola is very rich on diamonds and many other minerals and metals.

The southern African country is therefore mostly receiving in its mining and energy sectors. However, the improving investment climate in Angola has also led to the slow establishment of a manufacturing industry in the country. Earlier this year, Volkswagen announced its plans to build cars in Angola together with an Angolan company.

Angola is still in a process of reconstruction and resettling large numbers of refugees after the long and brutal civil war. The reconstruction work is however increasingly counting on private and corporate investments.Further, large-scale investments in Angola are mainly focusing on infrastructure, including the telecom sector.

The Haitian Stock Exchange begin

2007-04-11T17:22:00.001+01:00

The Haitian Stock Exchange strongly believes that personal and aggregate wealth, micro and macro-economic development and growth can best be fostered and created in an atmosphere of generalized liquidity, enlightened entrepreneurship and adequate access to capital, all subject to an uncompromising application of regulatory requirements.

For many years individuals and institutions alike have considered the cure to the problems of economic underdevelopment in terms of massive grants, foreign aids, subventions, and other forms of exogenous capital assistance to the underdeveloped countries.
Today despite such transfers totaling many billions of dollars from the industrialized nations to the less developed nations, the economic impact of those inflows has fallen far short of expectations.

The Haitian Stock Exchange proposes to prospect, incite, recruit, and mobilize local capital as it endeavor to
- Develop a securities market in HAITI
-Organize primary and secondary market for fixed income and stocks in the Republic of Haiti---
-Train , recruit the personnel , create the alliances necessary to support the operation of a securities market in Haiti
-Conceive the regulatory requirement for listing and for affiliation with the Haitian Stock Market
-Work on securing listing on the US market, for Haitian companies listed on the Haitian market
-Develop the alliances necessary for clearing, settlement and fiduciary services.

The Africa you never see

2007-04-07T02:15:00.000+01:00

The Africa you never see
Carol Pineau

In the waiting area of a large office complex in Accra, Ghana, it's standing room only as citizens with bundles of cash line up to buy shares of a mutual fund that has yielded an average 60% annually for the past seven years.

They're entrusting their hard-earned cash to a local company called Databank, which invests in stock markets in Ghana, Nigeria, Botswana and Kenya that consistently rank among the world's top growth markets.

Chances are you haven't read or heard anything about Databank in your daily newspaper or on the evening news, where the little coverage of Africa that's offered focuses almost exclusively on the negative - the virulent spread of HIV/Aids, genocide in Darfur, the chaos of Zimbabwe.

Yes, Africa is a land of wars, poverty and corruption. The situation in places like Darfur, Sudan desperately cries out for more media attention and international action.

But Africa is also a land of stock markets, high rises, Internet cafés and a growing middle class. This is the part of Africa that functions. And this Africa also needs media attention, if it's to have any chance of fully joining the global economy.

Africa's media image comes at a high cost - even, at the extreme, the cost of lives. Stories about hardship and tragedy aim to tug at our heartstrings, getting us to dig into our pockets or urge Congress to send more aid.

But no country or region ever developed thanks to aid alone. Investment, and the job and wealth creation it generates, is the only road to lasting development. That's how China, India and the Asian Tigers did it.

Highest return on FDI in the world
Yet while Africa, according to the US government's Overseas Private Investment Corporation, offers the highest return in the world on foreign direct investment, it attracts the least.

Unless investors see the Africa that's worthy of investment, they won't put their money into it. And that lack of investment translates into job stagnation, continued poverty and limited access to education and health care.

Consider a few facts. The Ghana Stock Exchange regularly tops the list of the world's highest-performing stock markets. Botswana, with its A+ credit rating, boasts one of the highest per capita government savings rates in the world, topped only by Singapore and a handful of other fiscally prudent nations.

Cellphones are making phenomenal profits on the continent. Brand-name companies like Coca-Cola, GM, Caterpillar and Citibank have invested in Africa for years and are quite bullish on the future.

Caricaturing a continent
The failure to show this side of Africa creates a one-dimensional caricature of a complex continent. Imagine if 9/11, the Oklahoma City bombing and school shootings were all that the rest of the world knew about America.

I recently produced a documentary on entrepreneurship and private enterprise in Africa. Throughout the year-long process, I came to realise how all of us in the media - even those with a true love of the continent - portray it in a way that's truly to its detriment.

The first cameraman I called to film the documentary laughed and said, "Business and Africa, aren't those contradictory terms?" The second got excited imagining heart-warming images of women's co-ops and market stalls brimming with rustic crafts. Several friends simply assumed I was doing a documentary on Aids. After all, what else does one film in Africa?

The little-known fact is that businesses are thriving throughout Africa. With good governance and sound fiscal policies, countries like Botswana, Ghana, Uganda, Senegal and many more are bustling, their economies growing at surprisingly robust rates.

Somalia: surprise, surprise
Private enterprise is not just limited to the well-behaved nations. You can't find a more war-ravaged land than Somalia, which has been without a central government for more than a decade.

The big surprise? Private enterprise is flourishing. Mogadishu has the cheapest cellphone rates on the continent, mostly due to no government intervention. In the northern city of Hargeysa, the markets sell the latest satellite phone technology. The electricity works.

When the state collapsed in 1991, the national airline went out of business. Today, there are five private carriers and price wars keep the cost of tickets down. This is not the Somalia you see in the media.

Obviously life there would be dramatically improved by good governance - or even just some governance - but it's also true that, through resilience and resourcefulness, Somalis have been able to create a functioning society.

African solutions
Most African businesses suffer from an extreme lack of infrastructure, but the people I met were too determined to let this stop them. It just costs them more. Without reliable electricity, most businesses have to use generators. They have to dig bore-holes for a dependable water source. Telephone lines are notoriously out of service, but cellphones are filling the gap.

Throughout Africa, what I found was a private sector working hard to find African solutions to African problems.

One example that will always stick in my mind is the CEO of Vodacom Congo, the largest cellphone company in that country. Alieu Conteh started his business while the civil war was still raging. With rebel troops closing in on the airport in Kinshasa, no foreign manufacturer would send in a cell phone tower, so Conteh got locals to collect scrap metal, which they welded together to build one. That tower still stands today.

As I interviewed successful entrepreneurs, I was continually astounded by their ingenuity, creativity and steadfastness. These people are the future of the continent. They are the ones we should be talking to about how to move Africa forward.

Obsession with victims, saviours
Instead, the media concentrates on victims or government officials, and as anyone who has worked in Africa knows, government is more often a part of the problem than of the solution.

When the foreign media descend on the latest crisis, the person they look to interview is invariably the foreign saviour, an aid worker from the United States or Europe. African saviours are everywhere, delivering aid on the ground. But they don't seem to be in our cultural belief system.

It's not just the media, either. Look at the literature put out by almost any non-governmental organisation. The better ones show images of smiling African children - smiling because they have been helped by the NGO. The worst promote the extended-belly, flies-on-the-face cliché of Africa, hoping that the pain of seeing those images will fill their coffers. "We hawk poverty", one NGO worker admitted to me.

Last November, ABC's "Primetime Live" aired a special on Britain's Prince Harry and his work with Aids children in Lesotho. The segment, titled "The Forgotten Kingdom: Prince Harry in Lesotho", painted the tiny nation as a desperate, desolate place. The programme's message was clear: This helpless nation at last had a knight - or prince - in shining armour.

By the time the charity addresses came up at the end, you were ready to give, and that's good. Lesotho needs help with its Aids problem. But would it really have hurt the story to add that this land-locked nation with few natural resources has jump-started its economy by aggressively courting foreign investment?

The reality is that it's anything but a "forgotten kingdom", as a dramatic increase in exports has made it the top beneficiary of the African Growth and Opportunity Act (AGOA), a duty-free, quota-free US-Africa trade agreement. More than 50 000 people have gotten jobs through the country's initiatives.

Couldn't the programme have portrayed an African country that was in need of assistance, but was neither helpless nor a victim?

Whose portrait of Africa?
Most of the time, Africa is simply not on the map. The continent's booming stock markets are almost never mentioned in newspaper financial pages. How often is an African country - apart, perhaps, from South Africa or Egypt or Morocco - featured in a newspaper travel section? Even the listing of worldwide weather includes only a few African cities.

The result of this portrait is an Africa we can't relate to. It seems so foreign to us, so different and incomprehensible. Since we can't relate to it, we ignore it.

There are lots of reasons for the media's neglect of Africa: bean counters in the newsroom and the high cost of international coverage, the belief that American viewers aren't interested in international stories, and the infotainment of news. There's also journalists' reluctance to pursue so-called "positive stories". We all know that such stories don't win awards or get front page, above-the-fold placement.

But what's happening in Africa doesn't need to be cast in any special light. The Ghana Stock Exchange was the fastest-growing exchange in the world in 2003. That's not a "positive" story, that's news, just like reports on the London Stock Exchange. I imagine a lot of consumers would have found it newsworthy to learn where they could have made a 144% return on their money.

My independent film was made possible by funding from the World Bank, for which I am extremely grateful. But the bank wouldn't have had to step in if the media had been doing their job - showing all Africans in all facets of their lives.

In a business that's supposed to cover man-bites-dog stories, the idea that Africa doesn't work is a dog-bites-man story. If the media are really looking for news, they'd look at the ways that Africa, despite all the odds, does work.

Author's e-mail: capineau@aol.com

Carol Pineau, a journalist with more than 10 years of experience reporting
on Africa, is the producer and director of the film "Africa: Open for
Business," which premiered last week at the U.S. Chamber of Commerce.