Global Market Review and Outlook Week Ending 29 April

LAGOS, Nigeria, Capital Markets in Africa — In the week, the major events that shaped market performance were the US Fed meeting outcome and the BOJ’s decision. The US Fed completed its third meeting for the year on Tuesday and decided to keep its benchmark rate unchanged while reassuring investors that it will continue to assess economic developments amid slow and steady growth across the globe. Similarly, the BOJ’s decision to keep rates stable came as a shock to the system following increased speculations about a further deepening of rates into negative territory.

Performance across global markets for the month of April has been broadly positive with M-o-M gains across sectors. The best performing markets for the month were Russia RTS (+12.7%) which was broadly driven by the rally in oil prices in the month, Brazil Ibovespa (+8.5%) and Egypt EGX (+3.3%).  This week, performance across regions under our coverage closed bearish. In the developed markets, US NASDAQ and S&P 500 fell 2.1% and 0.8% W-o-W respectively following increased sell-offs in tech stocks, notably Apple Inc. after the tech giant reported its worst performance since 2003. Similarly, the UK FTSE slid 0.4% W-o-W. The negative sentiments filtered into the European markets as the France CAC and the German DAX also fell 2.0% and 1.9% W-o-W though performance for the month remains positive, up 2.2% and 2.0% W-o-W and M-o-M respectively. In the Asian Markets, the Japan Nikkei dipped the most, losing 5.2% W-o-W as the increasing speculations of a further expansion in monetary stimulus, were quelled by the BOJ. Consequently, the monthly performance of the index turned bearish, down 0.6% M-O-M. The Hong Kong Hang Seng equally declined 1.9% W-o-W, but posted a positive performance for the month (+1.4% M-o-M).

Across markets in the BRICS classification, performance was mixed as the India BSE led losers, down 0.9% W-o-W. In the same vein, the Chinese Shanghai Composite declined for the 2^nd consecutive week, down 0.7% W-o-W following further regulatory moves that further dampened already weak sentiments. The Russian RTS stretched its bullish run into the 4^th consecutive week, appreciating 2.3% W-o-W as Oil prices touched US$48.4/barrel during the week. On a monthly basis, the RTS was the best performing index in the classification. Likewise, the Brazil Ibovespa appreciated 2.7%  W-o-W despite the mounting political tensions in the country and remained the second best-performing index in the region for the month (+8.5% M-o-M). The South African FTSE closed flat W-o-W.

Save for the Nigerian All Share Index which appreciated 0.9% W-o-W, the African Markets were broadly bearish. The Ghana GSE depreciated the most, down 0.8% W-o-W, followed by the Kenya NSE (-0.5% W-o-W) and the Egypt EGX (-0.3% W-o-W). However, the Egypt EGX posted the best return in the African markets, for the month (+3.3%) while the Ghana GSE was the worst performing (-4.3% M-O-M).

Source: Afrinvest (West Africa) Limited Research Team