Mastercard Inc (MA), Visa Inc (V): Profit From Africa’s Growth With These 3 Early Movers

Indeed, it appears that finance is taking off in Nigeria as the country’s stock market has outperformed all of its peers on the African continent during the first part of this year. This is a result of improving confidence in the African market by international investors and growing wealth within the country, indicating that Deutsche Bank AG (USA) (NYSE:DB) could be entering a lucrative market.

A cheap bank

While, Visa, MasterCard, Barclays, and Deutsche are all expanding in Africa, the best bet and currently trading at below book value is Citigroup Inc (NYSE:C). Citigroup Inc (NYSE:C) has adopted a top-down approach in Africa, helping governments to sell bonds and offer banking services to the biggest companies in each country. A top-down approach has allowed the company to build a large network of clients and influence in Africa.

That said in the company’s most recent earnings report, revenue from the Citigroup Inc (NYSE:C) operations in Europe, the Middle East and Africa fell 3%. However, the company still has a broad African presence, operating in 15 countries with 1,200 employees – the company has been in Africa for 50 years. With Africa gaining traction as the leading emerging market economy, Citi should be well placed to take advantage of both growing international and domestic monetary transactions, despite its short term weakness.

Conclusion

Overall, Mastercard Inc (NYSE:MA)’s new card scheme will corner the market in Nigeria, opening up the potential for rapid growth in the country. However, its peer Visa Inc (NYSE:V) has exposure to the whole African continent and has cornered the mobile money market, which makes it my pick for the best play on the rapidly developing financial industry in Africa.

The article Profit From Africa’s Growth With These 3 Early Movers originally appeared on Fool.com and is written by Rupert Hargreaves.

Fool contributor Rupert Hargreaves has no position in any stocks mentioned. The Motley Fool recommends MasterCard and Visa. The Motley Fool owns shares of Citigroup Inc and MasterCard. Rupert is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.

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