Sub-Saharan Africa stocks bullish in Q1

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Southern Times Correspondent Harare. — The first quarter of 2019 saw most of the SubSaharan African stock markets recording positive returns. The regional stock markets exhibited bullish trends with the Kenya, Uganda and South Africa stock exchanges gaining 12 percent, 8 percent and 5 percent in the quarter. However, for Southern African countries, stock performance was mixed with countries like Zimbabwe witnessing a bearish performance because of increased inflation and forex shortages. Starting with the celebrators, the South African JSE’s all share index rose by more than 7percent in Q1 of 2019 due to booming mining shares. In spite of sore deteriorations in some of its main listings and the weakening currency, the South African stock market had a green first quarter of the year. Namibia’s NSX Overall increased 10,58 percent since the beginning of 2019. According to the Bank of Namibia April 2019 economic brief, the country’s economic growth is expected to be boosted mainly by the construction sector, hotels and restaurants. On the other hand, slow growth is expected to come from the wholesale and retail sectors. The bank further anticipates that the nation may face risks from the reduced uranium production due to low international price increases of the commodity and the erratic rainfall, which may also affect the 2019 agriculture output The Malawi stock market was, however, bearish in the Q1 2019 as it registered a return on index of –5,80 percent (-5,97percent in US$ terms). According to the Malawi Stock Exchange quarterly report, on the debt market, three treasury notes were listed in Q1 2019 bringing the total of listed debt securities to 12. The market transacted a total of 420 679 180 shares at a total consideration of MK14 164 322 236,44 (US$19 390 837,52) in 721 trades. In the corresponding period 2018, the market transacted a total of 321 380 401 shares at a total consideration of MK10 148 122, 135,99 (US$13 984 671,78) in 386 trades. This reflects a 30,90 percent increase in terms of share volume and a 39,58 percent (38,66 percent in US dollar terms) increase in share value. Of the shares traded, 152 755, 283 NBS shares and 36 416 812 NICO shares were traded as negotiated deals. Daily average share trades exhibited similar trends where the market registered an average daily volume of 6 785 148 shares compared to 5 183 555 shares traded in the corresponding first quarter of 2018. As at 31 January 2019 the Lusaka Stock Market Exchange witnessed a total of 13 trades with a volume 58 600 and turnover 50 941,56. The country reports have highlighted that top commercial banks will have a bullish performance in 2019. Stanbic Bank Zambia during an economic brief in the quarter predicated positive economic growth projections. Zimbabwe’s Industrial Index decreased 12,17 percent since the beginning of 2019 as the quarter’s top gainers were mainly small cap stocks as investors sought value against inflation. Analyst perceive that as the economy stabilises, more foreign investors may come through. However, improvement of the market is mainly anchored on the performance of the interbank market and its ability to constantly avail forex for the foreign investors. “Until forex supply is constant, most investors would prefer to invest in the export oriented listed companies as confidence in the RTGS dollars is still limited,” stated Marjory Sambo, a banker. According to Cytonn Research, a research company based in Kenya, the Sub-Saharan Africa region is expected to perform well in the coming quarters supported by increased public spending on infrastructural development owing to the high demand for basic needs. In their Q1 2019 Market Watch report, the experts indicated that the key risks in the region remain difficult business conditions and poor infrastructure, reliance on commodity exports, political tension in some countries and debt sustainability due to high levels of public debt in most economies in the region. Stock markets valuations also remain attractive for long-term investors for some of the countries in the region. “The improved regional economic growth prospects remain key towards enhancing investor sentiment and attracting investment inflows into the region,” stated the report.

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