| DAVOS, Switzerland
DAVOS, Switzerland Jan 25 Move over, China. The
market that has got bankers attending the World Economic Forum
at Davos this year excited is Africa.
"One market where we see plenty of opportunity is Africa,"
Peter Sands, Standard Chartered's chief executive, said
during an interview. "It's a part of the world that doesn't get
so much focus because everyone, quite rightly, is all excited
about India and China and the whole ASEAN region."
Chinese banks were among the first to make their way into
the continent, with ICBC, the world's biggest bank by
market value, having bought a 20 percent stake in South Africa's
Standard Bank in 2007.
Since then, other banks have started making their way into
the region, mostly to facilitate trade between Africa and
resource-hungry China. HSBC's chief executive for the
Middle East and North Africa Simon Cooper called this
"There's a lot of work facilitating companies from China
that want to go to Africa and we expect such trade to continue
to grow," Cooper said in an interview.
Asian companies such as Chinese telecoms equipment maker
Huawei have been in Africa for years, building
infrastructure such as telecoms towers in countries from Libya
"We've invested in companies that are doing a lot of work in
Africa," said John Zhao, chief executive of Hony Capital, a
private equity firm with some $7 billion in assets under
"We see the weak infrastructure in some African countries as
an opportunity. If everything was already perfect, they wouldn't
need us any more, would they?"
Acquisitions and other such attempts to grow in Africa have
often proved difficult to pull off successfully. In 2011, HSBC
walked away from a bid for South Africa's Nedbank,
saying it failed to meet its acquisition requirements.
The revenue pie for banks in Africa is also far smaller than
in other regions, with total investment banking fees in Africa
and the Middle East about $1 billion last year compared with
Asian fees which clocked in at almost 10 times that.
"There are always risks, but if we go in only when it's big
and everything is grown up, that makes things a lot more
difficult," said Zhao at Hony Capital.