Relative calm follows volatile start

To the relief of investors, the double-digit volatility experienced in African markets in January subsided in February with six of the 11 main indices in Africa, ex South Africa, recording gains and five losing ground.

Namibia’s NSX Overall Index was the month’s best performer, reversing a -1.72% decline in January with a 3.13% gain, nudging it 1.35% into positive territory year to date.

Nigeria’s All Share Index clawed back 2.74% in February following a -16.5% rout in January, leaving the index down -14.22% on the year. All eyes have been on Nigeria’s currency, the naira, which has come under severe downward pressure against the US dollar in the wake of the collapse in oil prices. So far, the Nigerian government has resisted pressure to devalue the currency while the naira has declined steeply on the “parallel” market. A widening spread between the official and parallel exchange rate, along with a shortage of dollars on the official exchange market, has impacted supply lines for businesses that import raw materials.

Egypt’s EGX 30 rallied 2.68% in February following a -14.55% deficit the month before, to end the month -12.26% in the red year to date.

Kenya’s NSE 20 gained 2.36% in February on the back of a -6.62% decline in January, ending the month -4.42% down for the year so far.

The Morocco All Share Index (MASI) gained 1.63% in February and was 1.77% in positive territory for the year.

The Lusaka All Share increased 0.39% in February, leaving it -2.78% down for the year.

Zimbabwe’s ZSE Industrial Index led the losers with a -3.44% decline in February and was -13.37% in deficit on the year. The index was also the worst performer in 2015, plummeting -29.31% for the year, dragged down by declining earnings and uncertainty over indigenisation and economic-empowerment policies.

Tunisia’s TUNINDEX gave back -2.36% in February and was 4.88% in positive territory year to date following a 7.41% gain in January.

Botswana’s Gaborone Index retreated -1.98% in February on the back of a -1.53% decline the month before, leaving it -3.48% down year to date.

The SEMDEX in Mauritius gave back -1.75% in February, having gained 1.76% the month before, leaving it slightly underwater at -0.02% for the year.

Ghana’s GSE Composite Index retreated -1.59% to end the month -1.14% in negative territory for the year. Copyright. HedgeNews Africa – March 2016.