Northshore Magazine

Frontier Market Spotlight: Africa the Land of Resource Opportunities P R O M O T I O N I traveled to Cape Town, South Africa in early February with the twofold goal of first analyzing investment risks and opportunities in Africa, and secondly, studying investment potential of the battered and weary mining industry. The key answer to the investment potential in Africa lies in the questions surrounding the sustained growth rates from three emerging market countries: China, India and Brazil. Today the mining industry is discounting a crash in the emerging economies growth, with China, India and Brazil all dropping its growth to low single digits. I believe the growth rates for these economies may have already experienced most of the slowdown in this cycle. The next major surprise may be a modest pickup in growth from these developing economies. The Mining Indaba conference which I attended is the largest global mining conference in the world and presented much data on the growth rates of the emerging markets. Although growth has slowed, it has not stopped. As hundreds of millions of people move up the income ladder and consume more of the following: appliances, cars, kitchens, trains, planes, air conditioners and more, this will drive continued demand for steel, aluminum, copper, stainless steel, zinc, and platinum. Therefore, the emerging and frontier markets outlook continues to be a bright spot in spite of the generally negative investment and economic sentiment today about China, Brazil and India and emerging economies in general. Africa is very fragmented with 54 countries, 41 currencies, and more than 2,000 languages. Eight of these countries account for 72 percent of GDP of about $2 trillion. Africa is about 11% the size of the US economy. The largest four countries in Africa are South Africa, Egypt, Nigeria, and Algeria. Just how large is Africa? It's big. You can fit USA, China, India, Eastern Europe, and have room for France, Italy, Germany and Spain. This explains the vast resources...Africa is a very large continent. Sixteen of Africa's 54 countries are fully democratic today versus three just twenty- five years ago. The mining industry makes up about twenty percent of GDP in Africa. We believe that a well-diversified portfolio that includes some high quality Africa growth companies will enhance the long-term equity performance of most investment portfolios. 216 Essex Street, Salem, MA 01970 | (978) 745-9233 | (800) 888 – MGMT (toll free) | info@eCabot.com | www.ecabot.com Cabot Wealth Management is an SEC registered Investment Advisor. Any specific reference to investments in this piece is for informa onal purposes only and should not be taken as advice. All investments can lose money and past performance is not a guarantee of future results. JOIN OUR NEWEST WORKSHOP! Interna onal Inves ng: Insights from Global Travels Wednesday, April 16, 2014 at 6:00pm Cabot Wealth Management 216 Essex Street Salem, MA 01970 Registra on required. Sea ng is limited. RSVP by April 14, 2014 at 800-888-6468 or info@eCabot.com Rob Lu s a er climbing the 3,900 foot Table Top Mountain in Cape Town, South Africa. Rob Lutts, President and Founder | Cabot Wealth Management, Inc. 11988_CabotManagement.indd 1 2/14/14 10:34 AM

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