African Stock Market February 2016: BRVM Bourse & Kenya Stocks reward local and foreign investors

LAGOS, Nigeria, Capital Markets in Africa —Stronger commodity prices helped most African stock markets to rebound in February. The rally has been sparked by a rebound in commodity prices with gold up 21 percent from its December low. Commodities are rallying amid more optimism over economic growth in China, while negative interest rates in countries like Japan and Switzerland are increasing the appeal of gold as a safe haven.

Consequently, African equity market performance measured by country equity benchmark index returns ended in positive for the month, with ten gainers and eight losers on the local currency basis. The February’s average return of 0.6 percent was recorded across eighteen African stock indices.  Also, among the eighteen equity market Zimbabwe equity market (measured by Industrial index) was the worst performer after sagging by 3.4 percent to end at 99.5 points. The benchmark index falls 13 out of the 21 trading sessions.

Looking at the green zone, BRVM bourse (measured by BRVM Composite All Share) topped the positive return chart after adding 4.65 percent or 13.20 points to end at 302.97 points. Out of the 21 trading days, the index ended positive in 13 trading days, with the maximum daily gain of 1.60 percent (recorded on February 16) and minimum daily loss of 1.13 percent (occurred on February 22). The equity market capitalization added XOF 281 billion (about US$466 million) to close at XOF  7,5541 billion relative to the end of January trading sessions’ market capitalization of XOF 7,273 billion.

Kenya’s Nairobi Securities Exchange All-Share was the second best performer by gaining 3.82 percent to settled at 142.03 percent. The benchmark index ended positive 13 out of 21 trading days with five gains at the last five days of the month. These gains was as a result of investors bet on higher earnings from company results. The equity market capitalization ended at KES 2,008 billion after adding KES 73.7 billion (c.US$726 million) or 0.47 percent from the market capitalization of KES 1,934 billion recorded at the end of previous month trading session.

Still in positive region, Tanzanian equity market (measure by Dar Es Salaam Stock Exchange All Share index) added 3.78 percent to end at 2376.83 points and the index ended 11 out of the 21 trading session in the month of February with average daily return of 0.18 percent.  While Namibian equity markets ( Namibia Overall Share Index) occupied the fourth position after surging by 3.13 percent to settle at 877.2 points. The average daily return of 0.18 percent, maximum daily returns 4.94 percent and minimum daily return of -4.54 percent were recorded during the month.

 The Nigeria equities market closed the month of February in green zone despite extensive losses amid sell-offs in banking and consumer goods bellwethers because of investors negative outlook on the earnings expectation (trigger by a profit warning issued by FBN Holdings). The index managed to gather 2.74 percent (dampen the year-to-date loss to 14.2 percent) to occupied the fifth position. The index ended in green zone 12 out of 21 trading sessions and average daily return of 0.13 percent.  The market capitalization ended at NGN 8.5 trillion having gained NGN 235 billion (US$1.2 billion) relative to end of January’s market capitalization of NGN 8.3 billion.

On US dollar basis, African equity added an average of 1.1 percent in February and -3.8 percent on year-to-date basis. BRVM bourse retained the best performer position on US dollar basis by compensating foreign investors with a return of 6.0 percent, as a result of appreciation of XOF against the US dollar about 1.4 percent.  In addition, due to depreciation of the US$ against Kenya Shillings (0.78 percent) and Namibian dollar (0.58 percent), these equity markets offered foreign investors a return of 4.63 percent and 3.73 percent respectively.  

The African equity benchmark indices, FTSE ASEA Pan Africa Index gained 1.3 percent in February (-6.3 percent year-t0-date) and the S&P All Africa Index rose by 1.7 percent in February (sagged by 3.9 percent on a year-to-date).

Note:

• The S&P All Africa index is a comprehensive benchmark for the African market, covering companies listed in 13 countries: Botswana, Côte d’Ivoire, Egypt, Ghana, Kenya, Mauritius, Morocco, Namibia, Nigeria, South Africa, Tunisia, Zambia and Zimbabwe plus companies listed in developed markets that derive the majority of their revenue from the African continent.
• The FTSE ASEA Pan Africa Index Series represents the performance of eligible securities listed on ASEA (African Securities Exchanges Association) member exchanges. It is a free float market capitalisation weighted index series constructed from securities domiciled in the almost eighteen countries.
• BRVM Bourse is the regional stock exchange for eight West Africa countries: Benin, Burkina Faso, Guinea-Bissau, Cote d’Ivoire, Mali, Niger, Senegal and Togo.