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Johannesburg - The unrest in Egypt poses a relatively low risk to the value of equities in sub-Saharan Africa, Imara Asset Management said on Friday.
John Legat, the head of Imara Asset Management, said that sub-Saharan markets, excluding SA, generally have low correlation with one another and with the major international economies.
The merchant bank said that some Middle Eastern and north African equity markets had fallen, at times by 20% or more, following the unrest in Tunisia and Egypt.
"Political risk has always had to be taken into account in Egypt. In the past this factor may have been underestimated by some investors," Legat said.
Protesters for and against Egyptian President Hosni Mubarak clashed in Cairo this week amid continuing political tensions in that country.
Legat said that apart from a possible devaluation of the Egyptian pound, it was not obvious what else a post-Mubarak government would do.
Concerns about market performance tended to focus on Middle Eastern and north African equity markets rather than sub-Saharan Africa, Imara said.
The asset management division said it feared the suspension of both the Egyptian and the Tunisian stock markets in recent weeks would put pressure on the Middle Eastern and north African asset class, leading to foreign selling possibly dampening any bounceback.
John Legat, the head of Imara Asset Management, said that sub-Saharan markets, excluding SA, generally have low correlation with one another and with the major international economies.
The merchant bank said that some Middle Eastern and north African equity markets had fallen, at times by 20% or more, following the unrest in Tunisia and Egypt.
"Political risk has always had to be taken into account in Egypt. In the past this factor may have been underestimated by some investors," Legat said.
Protesters for and against Egyptian President Hosni Mubarak clashed in Cairo this week amid continuing political tensions in that country.
Legat said that apart from a possible devaluation of the Egyptian pound, it was not obvious what else a post-Mubarak government would do.
Concerns about market performance tended to focus on Middle Eastern and north African equity markets rather than sub-Saharan Africa, Imara said.
The asset management division said it feared the suspension of both the Egyptian and the Tunisian stock markets in recent weeks would put pressure on the Middle Eastern and north African asset class, leading to foreign selling possibly dampening any bounceback.
