Nigeria turns the corner

Key African markets, ex South Africa, were mainly in the red for the month of March with only three – Nigeria, Ghana and Botswana – bucking the trend.

Nigeria’s All Share Index gained 5.48%, reducing its year-to-date deficit to -8.38%. Following the general election on March 28, outgoing Nigerian president Goodluck Jonathan conceded defeat to Muhammadu Buhari in a move widely hailed as positive for the continent’s largest economy. Strong headwinds were expected to continue as the economy continues to suffer the fallout from the slump in oil prices and a decline of more than 20% in the value of the naira against the US dollar since June 2014. However, bulls have started circling the depressed Nigerian equities market, which has declined some 38% since the start of 2014. “The Nigerian election results will act as real catalyst and that the market could go up 30-40% in the coming months,” predicted UK-based frontiers and emerging markets specialist Silk Invest in its recent commentary.

Ghana’s GSE Composite Index increased 1.95% but was still down 1.8% lower on the year.

Botswana’s Gaborone Index added 1.04% in March, taking its gain to 2.02% for 2015.

The Zambian economy experienced the most pain during the month with the Lusaka All Share down 10% in March, to leave it 16.5% in the red year to date, according to the website Investing in Africa. The mining sector, which accounts for approximately three quarters of the country’s export earnings, has been hamstrung by tax issues while copper prices declined to five-year lows at the start of 2015. The kwacha, meanwhile, has depreciated sharply against the US dollar.

Zimbabwe’s US$-denominated Industrials Index shed 5.43% in March with a year-to-date decline of 4.23%, while the Minings Index meanwhile was hammered, losing 19.51% during the period.

Kenya’s NSE 20 was down 4.43% for the month and sat 2.65% in positive territory on a year-to-date basis, before news broke of the tragic university attacks in early April.

Tunisia’s TUNINDEX declined 2.38%, leaving it at 4.38% in profit on the year.

The SEMDEX in Mauritius fell 2.15% in March, taking its year-to-date losses to 4.75%.

Egypt’s EGX 30 declined 2.13% in March on top of a 5.17% drop the month before, but the index was still 2.33% higher year to date, having gained 10.27% in January.

Morocco’s CFG 25 gave back 1.95% to end the month 7.89% higher year to date, making it the best-performing index so far in 2015 of the basket of indices we report on.

Namibia’s Overall Index slipped 0.38% in March, leaving it 6.46% up for the year so far. Copyright. HedgeNews Africa – April 2015.