Zurich 21 June, 2010. This week's financial sentiment tracker highlights the positivity generated towards the African communications sector and the general positive developments among analysts as the African Progress Panel´s development report was heavily analyzed by the FT. For citied analysts, telecoms growth and the established African economies of South Africa and Nigeria represented key investment areas, as does Ghana. In Europe, the Swiss National Bank´s Euro strategy came under the spotlight, and led to some doubts being cast over both currencies.
As the World Cup rolls on, the African agenda has become more prominent in the media, and the financial investigation of African economies is no exception. For economic journalists around the world, South Africa remains the key country in Africa. However, analysts are also being called on to investigate significant growth areas in Nigeria, Ghana, the Ivory Coast and Kenya. In June, the technology sector, particularly growth in telecommunications, is being viewed quite positively. “African economies are generally regarded in terms of single resources: Nigeria has oil, Ivory Coast has Cocoa and so on – but the potential uptake in mobile phones and internet communications has become apparent in June´s coverage” says Media Tenor head of economic research Matthias Vollbracht. “More importantly there are active business and political leaders, such as Mo Ibrahim and Kofi Annan´s African Progress Panel, who have become quite savvy in promoting the economic development of Africa in a positive way to Western journalists.”
The African growth story was present in the coverage of JSE companies, with Telkom leading the analyst citations for the top 40 JSE companies in June. The growth of the Nigerian market was particularly in focus in the South African financial press, and the management story was also commented on. For Media Tenor, this represents a sea-change in African company coverage, “South African analyst coverage has usually centered on the mining sector – but the topic of African growth at the consumer level has also seen a focus on Telkom in Nigeria – it is significant that journalists are seeking out expert opinion in this area” says Vollbracht.
Agricultural commodities markets received some significant attention as a story on hedge fund losses on Coffee speculation came to light in the FT. Analyst presence in discussing the rise of coffee prices led to the overall consensus that the commodity price would most likely continue to rise. “The current coffee discussion revealed the role of speculators in the commodity market and this is a topic which economic journalists tend to take to” says Vollbracht. According to the Media Tenor researcher, there are still some real issues to work through in the agricultural markets, as supply issues around sugar, which arose due to environmental conditions in India have not yet been fully discussed. Despite the brief presence of coffee and an investigation into the aging cocoa crops of the Ivory Coast, Gold remains very much at the centre of the commodities discussion, as the continued overall instability and uncertainty remain.
Finally, the Euro crisis still appears to have some way to go before it is resolved, and over the last two weeks the Swiss National Bank´s Euro reserves have come under the spotlight. Analysts were somewhat undecided if the “artificial” support of the Swiss Franc would be effective. The end result is that sentiment for the Franc sank, although the jury is still out on the long term effects.
Media Tenor´s financial sentiment tracker will be released weekly at http//www.mediatenor.com Next week: US technology stocks, Asian economies, Real Estate markets, the Renminbi
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