Tag Archives: NPSNY

Trading the Globe: South Africa

The World Cup is upon us, so as the world watches South Africa, we talked about the country’s unique investment proposition this week on CNBC’s Trading the Globe.

South Africa has spent about $5.5 billion to build stadiums, roads and high-speed trains as part of its overall program of preparing to host the World Cup this month. The government hopes that a higher global profile will help the country attract about three times that much in direct foreign investment.

Many investors still think about South Africa in terms of gold, and many of the world’s great precious metals names trade on the Johannesburg Stock Exchange: Gold Fields (GFI), RandGold (GOLD), Harmony Gold (HMY), AngloGold Ashanti (AU). With gold trading around record levels, these stocks are obviously in the spotlight.

While the country mines gold for export in the form of its famous krugerrands, it also has a developed domestic industrial and consumer economy.

Sasol (SSL) is one of Africa’s biggest oil companies and has an interesting chemical business as well.

Naspers (NPSNY) is a global media conglomerate. Standard Bank (SBGOY) is one of the great emerging markets financial groups. MTN (MTNOY) is a huge cellular network, while Millicom (MICC) also does a lot of business in South Africa.

For exposure to South Africa, the iShares ETF (EZA) is a great start. The portfolio is remarkably balanced — only 22% of its holdings are in gold miners — and offers U.S. investors a chance to buy into many consumer names that do not trade here.

More advanced traders can also work with the South African rand via the currency ETF SZR. The rand is often an interesting contrarian play because it is so closely associated with gold.


Trading the Globe