I read a study by the SEC on US investors and it go me thinking how none of the African markets have anything similar. The results of the profiling are interesting:-
- 38% of investors in the US get company information from corporate websites, 24% from portals
- 51% of US investors found the language used in annual reports “somewhat difficult” to understand and 21% “very difficult” – thats a total of 72% of the readers of annual reports finding difficulty in reading annual reports
- 55% of investors found “too much” information in annual reports
- 60% of investors revert to the Internet to find information missing in annual reports
- US investors do not read annual reports because “they are too complicated – 38% of respondents” or ”they are too long – 21% of respondents”
- 55% of US investors access information on their investments from the Internet
- 20% of US households invest in shares and 26% in mutual funds
My suggestion is that once the African Stock Exchanges Association sorts out its directionless state it should co-ordinate market- wide studies into African markets. They need not be complicated. I bet you studies on cell phone ownership and internet penetration and what the needs are of African investors will reveal some real opportunities for Africa’s markets and companies to improve their capital markets.
One last statistic here is the scary one: investment literacy was measured and 70% of Americans with investments in shares acknowledged they owned a part of the company BUT 22% thought they had lent money to the company by investing in its shares. There has to be a high percentage chance that Africans are more investment savvy than Americans if studies were indeed carried out.