Finally, fixed exchange rates contribute to illiquidity. Fixed exchange rates, like you have in Nigeria, go through periods, like now or when oil prices crashed in 2014, when they are not freely tradable, he says. The only ones are Allan Gray, Absa Asset Management and Sanlam’s $29m-under-management African Frontier Markets Fund (see table 2). “Valuations in many African markets are undemanding, with companies trading on single- digit multiples of depressed earnings. Today, it is the reverse.”Nevertheless, sentiment towards African markets governments fail to realise that it is these very controls that are actively discouraging foreign investors from entering and materially reducing the liquidity on their local markets.”

Source: News 24 April 29, 2021 18:33 UTC