You might think of Africa as a continent plagued with stagnant economic growth, poverty, war and disease – but one nation might be emerging as a gem – South Africa.
Already known for it’s rare diamonds, South Africa’s thirst for capitalism and freedom has turned this republic of 48 million into Africa’s economic powerhouse.
With a GDP of $255 billion, the country represents a quarter of the continent's output. And its stock market is up more than 50% from 2006, fueled by natural mineral and metal resources.
South Africa is also becoming a major player in the global banking space. The country's key bank, Standard Bank, is a core player in financing emerging markets and recently sold a stake to China.
But this rapid growth is coming with costs. South Africa's leading power company, Eskom is unable to keep up with demand so rolling blackouts throughout the country are leaving millions in the dark for hours. And top mining companies are suspending virtually all operations on fears workers will be trapped underground.
However, as investors have seen so many times before, chaos like this can cause a fast money buy-in.
I think South Africa is a good place in which to get involved, says Tim Seymour, as long term play in emerging markets. However it’s not without some risk.
Tim Seymour’s picks
- Sasol Limited (SSL)
- Gold Field Limited (GFI)
- Harmony Gold (HMY)
- iShares MSCI South Africa Index (EZA)
- MTNOY on the pink sheets.
I prefer Jacobs Engineering (JEC), McDermott (MDR) and Fluor Corp (FLR), adds Guy Adami.
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Trader disclosure: On Feb.11, 2008, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders; Macke Owns (INTC), (DIS), (YHOO), (HAS); Najarian Owns (BIIB), (C), (CSCO), (MS), (MSFT), (XLF), (YHOO), (NOK), (ATI); Najarian Owns (FRE) Puts; Najarian Owns (AAPL) Calls, (NIHD) Calls, (OSIP) Calls, (DVN) Calls; Seymour Owns (AAPL), (CSCO), (F), (GM), (INTC), (MSFT), (TSO); Seygem Asset Management Owns (SSL), (GFI), (YHOO), (CHL), (COP), (NIHD)