Africa rising

African stock markets were among the world’s best performers in 2012 with Egypt, Nigeria and Kenya clawing back 2011 losses to lead the charge.

After falling 15.59% in November, Egypt’s EGX 30 bounced back more than 13.% in December to end the year up 50.24%. Despite a turbulent political backdrop, the EGX 30 was the continent’s best performing index in 2012, emerging from a -49.28% deficit in 2011. The extreme fluctuations on the EGX 30 reflected tensions surrounding president Mohamed Morsi issuing a decree in November 2012 that gave him sweeping autocratic powers. Morsi then rescinded the decree following widespread protests. The run-up to a December referendum to adopt a new constitution also sparked mass demonstrations by both critics and supporters.

Following a lacklustre performance in 2011 (-16.31%), the Nigerian All Share index was also a star performer for 2012, rising 35.45% in the year, boosted by a 5.98% surge in December. Reforms in the financial and banking sectors were cited as a key driver in bringing confidence to the market.

Kenya’s NSE 20 inched up by 0.51% in December, recording a noteworthy 28.95% rise for 2012, compared with a -27.69% decline the year before.

Ghana’s GSE Composite Index ended the year up 23.81%, gaining 5.84% in December. The index was down -2.34% in 2011. During December, incumbent President John Mahama narrowly won re-election and the result is being challenged in the Supreme Court.

Namibia’s Overall Index increased by 17.36% in 2012, boosted by a 6.9% surge in December. The index was down -3.34% for 2011.

Zimbabwe’s Industrials Index rose 1.49% for the month and recorded a 6.65% gain for the year, following a -3.58% decline in 2011.

Botswana’s Gabarone Index ended December -0.79% in the red but was up 7.73% for the year on the back of an 8.7% gain in 2011.

Morocco’s CFG 25 index plunged -4.25% in December, ending the year down -15.6%. The CFG 25 posted a -13.41% decline in 2011.

Zambia’s Lusaka All Share gained 3.16% in December but ended 2012 down -10.66%, compared with a 26.21% spike the year before.

The Mauritius SEMDEX was up 2.97% for December but ended the year down -7.95%, following a -4.02% fall in 2011.

Institutional investors are bullish on the region’s prospects for the coming year: “The Frontier Markets’ ship continues to sail away,” Silk Invest said in a note to investors, adding: “We have never been more enthusiastic regarding the favourable conditions for investor entry.”

Tutu Agyare, managing partner at Nubuke, also sees plenty of upside in Africa: “African markets look set to repeat their stellar performance in 2013,” he said. Agyare noted that most key African equity markets outperformed global capital markets in 2012, with the Egypt 30 Index, Nigerian All Share and Kenya All Share returning 42%, 40% and 38% in US dollars respectively.

Insparo also sees upside in the region for the year ahead, predicting that the growth outlook for Africa and the Middle East “should comfortably outperform global growth by around two percentage points”.

The IMF recently upgraded its 2013 GDP growth forecast for the African continent from 5.3% to 5.7%. Copyright. HedgeNews Africa – January 2013.

Market results        
Country Local Index Local Index (DEC) Local Index (2012)
Nigeria All Share 5.98% 35.45%
Ghana GSE Composite Index 5.84% 23.81%
Kenya NSE 20 0.51% 28.95%
Egypt EGX 30 13.2% 50.24%
Botswana Gaborone Index -0.79% 7.73%
Tunisia TUNINDEX -2.08% -2.59%
Morocco CFG 25 -4.25% -15.6%
Mauritius SEMDEX 2.97% -7.95%
Zimbabwe Industrials Index 1.49% 6.65%
Zambia All Share 3.16% -10.66%  
Namibia Overall Index 6.95% 17.36%  

Data source: Bloomberg