African opportunities knock

Africa’s growth story is set continue for 2014 according to the UN Economic Commission for Africa (ECA), which forecast GDP growth of 4.7% for the year and 5% growth in 2015*, with Nigeria and Ghana among those listed as outperformers. However, the basket of 11 indices we cover got off to a mixed start in January, with five decliners and six gaining ground.

Egypt’s EGX 30 recorded the best performance for the month, rallying 9.18% and adding to its 9.68% gain in December. The index was buoyed by the announcement that popular armed forces chief Field Marshal Abdel Fattah al Sisi has been cleared to run in parliamentary elections, a move that is widely seen as offering the best chance of stability. General Sisi played a key role in the downfall of Islamist president Mohammed Mors, following a wave of popular protest.

Ghana’s gravity-defying GSE Composite Index added 5.14% in January on the back of its 78.81% gain in 2013. However, Ghana’s GDP growth was only 4.1% in the first nine months of 2013, down from 7% in the corresponding period the year before*. Transport, manufacturing and mining were cited as the main sectors contributing to the growth slowdown with declining gold prices and production a major factor. Ghana’s inflation rate meanwhile reached 13.8% in January, up from 13.5% in December.*

Botswana’s Gaborone Index had a positive start to the year, gaining 4.43% in January and building on its 2.25% rally in December.

Tunisia’s TUNINDEX gained 2.67% in January, having been last year’s worst performer with a 4.33% decline.

Zambia’s Lusaka All Share added 1.22% for the month, building on a solid performance in 2013 which saw the index gain around 40%.

Morocco’s CFG 25, which was 1.70% down in 2013, started 2014 on a mildly positive note with a 0.30% gain in January.

Of the losers, Zimbabwe’s Industrials Index took the heaviest beating in January ending 6.67% to the downside.

Nigeria’s All Share declined 1.83% for the month after a 47.19% annual gain in 2013. The index shed more than 3% in the last week of January, dragged down by significant losses in companies such as Oando (-27%), Wapic Insurance (-15.2%) and Union Bank Nigeria (-14.4%).

Kenya’s NSE 20 shed 1.44% in January following a 3.41% loss in December.

Namibia’s Overall Index dropped by 1.84% for the month, eradicating its 1.32% gain during 2013.

The SEMDEX in Mauritius slipped 0.19% in January having closed 2013 with a 20.99% gain.

* Source: (UN Economic Commission for Africa World Economic Outlook, released 23 January 2014.
* Source: Centre for Policy Analysis (CEPA)
* Source: Ghana Statistical Service.