African markets are setting a new pace in 2012

African markets are setting a new pace in 2012 as trading volumes and indices have risen in many of the major exchanges. Innovation is taking hold in a number of economies with the introduction of advanced platforms in Nigeria and Zambia.

Nigeria’s All Share Index led the way forward in April, gaining 7.05%, with five other markets also posting gains. Continuing on from March’s strong performance, Tunisia’s TUNINDEX managed to gain 5.59% with Kenya’s NSE20 close behind with a solid 5.33%. Namibia’s Overall Index (2.34%), Botswana’s Gaborone Index (1.48%) and Ghana’s Composite Index (0.88%) rounded off the gainers in April.

Continuing its downward trend from March was Morocco’s Casablanca Index, which fell 5.7% in April. Zimbabwe’s Industrials Index suffered a similar fate, losing 5.27% in trading. After rising 50.51% on a year-to-date basis to March, the Egyptian EGX 30 has shed for two consecutive months with a drop of 1.46% in April. The Mauritian SEMDEX (-0.52%) and Zambian All Share (-0.95%) moved slightly into the red during April.

Nigeria’s Stock Exchange (NSE) has made claim to a number of advances in the pipeline over the coming years. The introduction of its highly anticipated NASDAQ OMX Group’s X-Stream platform will make it the fastest setup on the continent by the second quarter of 2013. The platform is believed to match orders in less than 100 millionths of a second, making information and trading available on a real-time basis.

The plan is to convert the stock and bond market over to the new system initially. Following this, the exchange aims to introduce an options market by 2013/14 and a futures market by 2016.

The exchange has recently revealed 10 market-makers and will commence with short-selling and securities lending, thereby enhancing market efficiency and liquidity. Lastly, the trading hours are set to rise, allowing longer trading days.

Zambian authorities have announced a new exchange referred to as BaDEx. The exchange aims to trade equities, derivatives, bonds and commodities, but remains in the infant stages. The exchange started with six stockbrokers and aims to source remote firms in South Africa.
Although Egypt’s EGX 30 dropped in April, a number of listings saw strong performances. EFG Hermes spiked 27% during trading as negotiations to sell off a number of their broking subsidiaries lifted profit expectations. However, the listing ended the month slightly off the mid-month high.

In Tunisia, positive growth forecasts of 3.5% for 2012 and a recovery in the tourism sector have lifted investor spirits, helping the market attain a year-to-date return of 7.77%, after suffering serious losses earlier on in the year.

Leading the pack in Nigeria was the United Bank for Africa, which lifted its share price 43.3% in April. The bank is in talks over merging with other African partners to meet stricter capital requirements and become increasingly efficient.

In an attempt to improve liquidity, the Committee of SADC Stock Exchanges has launched a website aimed at providing potential investors with the requisite data and information to make informed decisions. The website is hosted by I-Net Bridge and provides insight into 10 of Africa’s exchanges. See Copyright. HedgeNews Africa – May 2012.

Market results        
Country Local Index Local Index (Apr) Local Index (YTD)
Nigeria All Share 7.05% 6.65%
Ghana GSE Composite Index 0.88% 8.98%
Kenya NSE 20 5.34% 10.66%
Egypt EGX 30 -1.46% 36.52%
Botswana Gaborone Index 1.48% 2.45%
Tunisia TUNINDEX 5.59% 7.77%
Morocco CFG 25 -5.70% -6.35%
Mauritius SEMDEX -0.52% -4.86%
Zimbabwe Industrials Index -5.27% -11.18%
Zambia All Share -0.09% -5.94%  
Namibia Overall Index 2.34% 8.38%  

Data source: Bloomberg