China woes spur Africa fallout

Global markets took a beating in August, dragged down mainly by concerns about a slowing China economy. During the month, the Chinese markets suffered their worst rout in years and the Dow Jones closed at an 18-month low on August 25. Markets recovered towards month’s end, but volatility remained high.

African markets were not spared the fallout as investors headed for the exits. Adding to the woes, a basket of African currencies has been depreciating steeply in the face of the strong US dollar and sinking commodity prices.

Of the 11 main indices in Africa, ex South Africa, all ended the month in negative territory with several sitting on double-digit losses for the year to date.

Egypt’s EGX 30 experienced the most pain in August, diving 11.46% with a year-to-date decline of 18.75%.

Kenya’s NSE 20 has also recorded substantial year-to-date losses, of 18.31%, having plunged 5.18% in August. Additionally, a continued decline in tourism and falling tea production has exerted significant downward pressure on the Kenyan shilling.

Zimbabwe’s ZSE Industrial Index weakened 6.8% during the month and was 16.76% in the red for the year so far.

Nigeria’s All Share Index shed 1.64% in August and was down 14.35% year to date, or more than 22% in US dollar terms.

The Lusaka All Share ended the month down 13.6% in US dollar terms and 31.5% in the red year to date, exacerbated by falling copper prices and ongoing power shortages.

The SEMDEX in Mauritius slipped 2.28% and was 7.02% in the red for the year.

Ghana’s GSE Composite Index slipped 1.98% to end the month 4.7% down for the year.

Morocco’s CFG 25 was 3.77% lower for the month, taking its year-to-date performance to a negative 1.77%.

Namibia’s Overall Index lost 4.55% in August to end the month 5.52% lower on the year.

Only two indices have shown gains in 2015. Botswana’s Gaborone Index slipped 0.37% in August but has recorded a year-to-date gain of 14.67%, and Tunisia’s TUNINDEX gave back 2.59%, leaving it 7.83% in positive territory for the year so far. Copyright. HedgeNews Africa – September 2015.