The year started on a positive note for many African markets, with seven of the eleven main markets showing gains for the month. Egypt was the star performer in January, with the EGX 30 returning 29.12% for the month.
The MSCI Africa Frontier Markets Africa Index gained 0.51% during the month, compared with 11.24% from MSCI Emerging Markets and 5.72% from the MSCI World.
Namibia’s Overall Index was also strong in January, adding 7.42%, while Morocco’s Casablanca Index gained 2.04%. Nigeria’s All Share followed suit with a 0.7% gain as did Kenya’s NSE 20 (0.6%), Ghana’s GSE Index (0.57%) and Botswana’s Gaborone Index (0.08%).
On the down side, Zambia’s All Share Index lost 6.81% followed by Zimbabwe’s Industrial Index, which was down 5.03% during January. The Mauritian SEMDEX was down 3.18%, while Tunisia’s TUNINDEX fell 0.56%.
Egypt saw strong performance across all sectors with Orascom Telecoms and Orascom Construction extending their gains by 14.5% and 21.5%% respectively in January trading. Other strong performers through the month included Commercial International Bank (27%) and EFG Hermes (12.6%). Egypt remained politically stable in January as election results confirmed the moderate Islamist Freedom and Justice Party as victors, although the picture changed significantly in February as rioting against the Transitional Council broke out. On the economic front, due to the weakening Egyptian pound and heightened interest rates, the Egyptian Finance Ministry has entered into negotiations with the World Bank, African Development Bank and the IMF to help balance the budget deficit.
Namibia’s Overall Index growth was spurred by stocks dual-listed in South Africa. Industrial multinational Barloworld contributed significantly as it returned 17.87% in January and has gained 49.67% since September 2011. Nedbank performed well in January, returning 8.17%, while Namibia’s top-performing home-grown stock was financial services provider Trustco, which was 20.77% in the black by month-end.
Zambian investors responded negatively to the uncertainty caused by an announcement from Finance Minister Alexander Chikwanda concerning the Zambian Kwacha’s rebasing. The rebase is to be achieved by reducing denominations by three zeros. The highest denomination would be reduced from K50,000 to K50.
Banking stocks were the hardest hit, with Zanaco Bank falling 10.7% during the month. Significant capital requirement increases compounded the problem, as the finance ministry believes more stringent requirements are needed to prevent banking failures.
Lower tourist numbers have dealt a blow to Mauritian growth as forecasts reduced growth expectations by 0.4 percentage points to 3.7% for 2012. Hotel stocks fared the worst with a number of listings giving up value. Sun Resorts shed 13.23% while New Mauritius Hotels lost 5.52% through January. Bank of Mauritius gave up 7.14% as the general consensus appears apprehensive.
The World Bank has revised Ghanaian growth forecasts for 2012 downward to 12%. Oil production and construction were the main contributors to growth throughout 2011, however, relatively weak growth in traditional sectors such as agriculture and services affected growth forecasts.
London’s FTSE maintains its drive to establish an African index to open African opportunities to the international community. The index will include stocks listed on 16 of Africa’s exchanges and will be adjusted for investibility, including free float and liquidity. Copyright HedgeNews Africa – January 2012
|Country||Local Index||Local Index (YTD)||Local Index (Jan)|
|Ghana||GSE Composite Index||0.57%||0.57%|
Data source: Bloomberg