Newspaper article St Louis Post-Dispatch (MO)

Time May Be Right to Invest in South Africa Again

Newspaper article St Louis Post-Dispatch (MO)

Time May Be Right to Invest in South Africa Again

Article excerpt

For so many years, it was politically correct to scorn South Africa, and on this issue at least, Wall Street has kept in step.

But now, on the possible eve of a transition into democracy, even African National Congress leader Nelson Mandela is appealing for investors. "Come and invest in South Africa," Mandela pleaded last fall, "and join us in the struggle for economic development."

There is much at stake for South Africa, and the coming months hold the promise of enormous opportunity - and enormous risk. The same scenario awaits investors looking for a way to participate in the nation's rebirth.

Elections are slated for next April, and if democracy takes hold, South Africa could be a land of plenty for investors. But if the transition is unsuccessful, no one knows what will happen.

"I'm from Africa originally, and it's a wonderful place, but it's uncertain," said Susan Douse of Watson's Investment Consultancy, which advises pension managers on international investing.

"We would all love to hope that everything works out in April, and I pray the elections go well," Douse said. "There will be companies that will benefit, and if everything holds together, I think it will be a very exciting place for investors to be."

The excitement is already building. South Africa is emerging from a five-year recession. Its economy is growing at a pace of more than 5 percent a year, but the nation's central bank seems intent on holding down inflation and interest rates. Population is also growing rapidly, and the nation's infrastructure is intact. South Africa's stock market will likely end 1993 sharply higher.

The risks of investing in South Africa, however, are at least as compelling. After the April elections, the new government will be under the gun to bring the black majority into the process quickly, politically and economically. …

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