Africa Equity Weekly | 15 Jan 2016: Egypt, Nigeria, South Africa in red … Mauritius, Tunis in green

Lagos, Nigeria, Capital Markets in Africa — The global market’s poor start to the year continued this week as investors sold off on equities and junk bonds globally in a flight to safety due to increasing downside risk of a hard landing in China, credit defaults in high yield junk bonds, weaker global growth and softer commodity prices. Brent crude traded below the US$30.0pb line on Friday, with broader analysts’ outlook of a bottom ranging from US$20.0 — US$25.0/b.

African markets were also bearish at the end of Friday 15 January 2016, out of the eighteen African equity indices six ended in positive district and twelve in the negative region (Illiquid Swaziland All Share index and Malawian All-Share index remained unchanged to end at 327.25 points and 14,562.53 points respectively) compared to the previous week ending Friday 08 January 2015.  The overall average return of the eighteen stock indices was -2.30 percent week-on-week (w-o-w).

Egyptian EGX 30 Index was the worst performer after dropped 15.38%, which is the biggest one-week loss since March 2011 when trading resumed after the 25 January Revolution. The main index shed 1,065 points this week to close at 5,857.7 points, compared with 6,922.71 points last week. Market capitalisation lost around EGP 44.95 billion (US$5.74 billion) to EGP 384.03 billion, from EGP 428.98 billion last week.

Likewise, the Nigeria equities market was on a panic sell-off mode this week as investors dumped shares on account of the continuous slide in crude oil prices which heightened investors’ apprehension on the macroeconomic fundamentals, operating environment and financial performance of companies. Consequently, many investors rushed for the exit in a herd pattern with most blue-chip tickers with significant portfolio exposures sold off at record low prices. The market closed sharply negative on all the trading days, bringing W-o-W and YTD decline of the benchmark All Share Index (ASI) to13.0% and 18.0% as the index closed at 23,514.04pts. The highest declines were recorded on Wednesday (-3.6%) and Thursday (-3.4%) while it was down by 3.0% on the last trading day of the week.

Tunisia All Share index led the pack of gainers after adding 2.62 percent w-o-w to end the week at 5,300.64 points. The Zambia’s Lusaka All Share index gained on 2 out of the 5 trading days of the week and then gained 0.72 percent w-o-w.  In additional, Mauritius All Share benchmark index accelerated by 0.70 percent (w-o-w) to end at 1813.06 points and Ghanaian Composite Index increased by 0.42 percent, ending positive in 4 out of the 5 trading days.