Among U.S.-listed stocks that trade as ADRs, South African issues total a market capitalization of a little less than $40 billion. That makes South Africa the 25th most valuable region by assets — straddled by Sweden at No. 24 and Argentina at No. 26.
But South Africa is an interesting play for 2014 in that it is the best way to directly invest in sub-Saharan Africa and all it’s growth potential. And with forward P/E of just 9.3, it’s also a pretty decent value play at the same time.
Charles Sizemore, editor of Macro Trend Investor, is a massive bull on Africa in general:
“It’s the last major investment frontier, and the growth is very real. Per capita GDP has more than doubled in the past decade, and according to Deloitte, seven of the 10 fastest-growing countries in the world are in Africa.”
So how can you play this trend if you want to share in the potential of South Africa?
For starters, there’s the iShares MSCI South Africa ETF (EZA). The fund is down about 11% in the last year, but remember that emerging markets dramatically underperformed across the board in 2013. And if you believe in value investing, this may be a good opportunity to buy.
If you want to play stocks directly, one great options is telecom play MTN Group (MTNOY). Smartphones can provide even remote villages tremendous communications and commerce power to unlock growth, and MTN is a key part of that narrative across Africa. Chemicals and energy company Sasol (SSL) is more of a cyclical play but also headquartered in South Africa.