US financial turmoil ripples felt in Africa
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- khromadjo
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African stock markets are feeling the heat of the world financial crises created in the United States. At the Nairobi Stock Exchange of Kenya (NSE), the share price fell to a new historical low of Sh4.30 on Tuesday.
Strong indications have emerged that the Council of the Nigerian Stock Exchange (NSE) may have made headway in its efforts to bail out the nation's stock from its lingering slide. By the end of last week, foreign investors had reduced their South African equity holdings by R24bn this year, compared to net purchases of almost R60bn over the same period last year.
All these and recent trends show that finally, the global financial crises has begun hitting African continent. On Monday, Prime Minister Raila Odinga joined world leaders in warning that the financial crisis on Wall Street would inflict significant damage on African economies, including Kenya's.
Speaking on the sidelines of an international development conference in France, Odinga told Reuters that the turmoil in world markets “will impact very negatively on the Kenyan economy in the short and medium term.”
"They say that when America sneezes, Europe catches a cold, Asia develops pneumonia and Africa's tuberculosis gets worse. This is what we are beginning to see,” Odinga added.
World Bank and United Nations officials also spoke about Africa's prospects for continued economic growth. Panic on Wall Street and in other financial centres could cause Western investors to reduce their stakes in African businesses, Shanta Devarajan, the World Bank's top economist for Africa, said in Washington on Monday.
“Now there is a risk that if there is a really difficult financial crisis in the United States and Europe and risk aversion rises, it is possible these capital flows which have fuelled growth in Africa will fall,” Devarajan said.
In the case of Kenya, the NSE 20 share index, a key performance indicator, has over the past 12 months dropped by about 1,000 points, washing away about a quarter in returns. That means an investor who bought shares on all the 20 counters included on the NSE 20 index in October 2007 has by now lost a quarter of his investment.
Strong indications have emerged that the Council of the Nigerian Stock Exchange (NSE) may have made headway in its efforts to bail out the nation's stock from its lingering slide. By the end of last week, foreign investors had reduced their South African equity holdings by R24bn this year, compared to net purchases of almost R60bn over the same period last year.
All these and recent trends show that finally, the global financial crises has begun hitting African continent. On Monday, Prime Minister Raila Odinga joined world leaders in warning that the financial crisis on Wall Street would inflict significant damage on African economies, including Kenya's.
Speaking on the sidelines of an international development conference in France, Odinga told Reuters that the turmoil in world markets “will impact very negatively on the Kenyan economy in the short and medium term.”
"They say that when America sneezes, Europe catches a cold, Asia develops pneumonia and Africa's tuberculosis gets worse. This is what we are beginning to see,” Odinga added.
World Bank and United Nations officials also spoke about Africa's prospects for continued economic growth. Panic on Wall Street and in other financial centres could cause Western investors to reduce their stakes in African businesses, Shanta Devarajan, the World Bank's top economist for Africa, said in Washington on Monday.
“Now there is a risk that if there is a really difficult financial crisis in the United States and Europe and risk aversion rises, it is possible these capital flows which have fuelled growth in Africa will fall,” Devarajan said.
In the case of Kenya, the NSE 20 share index, a key performance indicator, has over the past 12 months dropped by about 1,000 points, washing away about a quarter in returns. That means an investor who bought shares on all the 20 counters included on the NSE 20 index in October 2007 has by now lost a quarter of his investment.
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- groups:
- Money, Greatest Depression
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- tags:
- Money, Markets, United States, Africa, 8 more
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- recommended by:
- Vierotchka,
- goldenways
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khromadjo
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With our recent illuminations of just how corrupted Wall Street has become, it seems now we are going to drag the whole world into this quagmire.
- 3 years ago
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khromadjo
