• by IPS Correspondents (london)
• Wednesday, December 21, 1994
• Inter Press Service

LONDON, Dic 21 (IPS) - Foreign investors have responded cautiously rather than enthusiastically to the lifting of anti-apartheid sanctions and South Africa's successful transition to full democracy. But the outlook for future investment is still bright.

In the wake of the April elections many unit trusts were launched -- especially in Britain -- to cater to the projected demand for investment opportunities in Africa's largest and most productive economy.

"After the elections, of course expectations were high that would be a lot of investment funds flowing in. But we can now see that many people were being over-optimistic," says Dr Willem Naude of the Centre for the Study of African Economies, Oxford University.

Credit Suisse -- one of the British-based financial houses, who launched their South African Fund in late June -- have been so far able to raise only 7.5 million dollars.

According to the company, this is not an insignificant commitment on the part of the investors -- both private and institutional -- nor has it dented their initial optimism about the country's potential to attract more investment.

Ian Chimes, managing director of Credit Suisse Investment Funds, points out that at its launch the fund was able to raise a "very encouraging" 3.75 million dollars and that since the fund closed in mid-July people continue to commit funds to it almost every day.

Like the other funds, they have bought stocks and shares in a wide range of sectors, including mining, construction, commodities, beverages and tourism.

"People are showing an interest. If you had invested in the launch period your initial outlay would have by now appreciated by 15 percent. So you see, the potential is there and investors are confident," he says.

The other main South-African oriented investment funds which have been launched since then are Save and Prosper's (S and P) Southern Africa Fund and another by The Old Mutual. The S and P have raised 16 million dollars and the latter 62 million dollars.

But despite these impressive-sounding figures, some analysts -- who say they do not want to take on the role of spoil sports -- maintain that they represent little more than a drop in the ocean of the country's investment needs.

© Inter Press Service (2014) — All Rights Reserved. Original source: Inter Press Service

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