In the chart above, African equities have been the worst hit since the year began followed closely by Middle East.
On Africa almost all markets are down year-to-date apart from the Tanzanian All Share Index which is up by 10% and Namibian Exchange NSX Overall index which is up by roughly 25% in dollar terms.
Generally equity markets in the Americas have been having a stellar year so far; specifically Peru which is up 52.4%, Colombia up by 26.1%, Chile 21.1% and Argentina 15.98% in dollar terms.
Argentina MERVAL Index changed by +6.49% compared to the previous week. Historically, the Argentina Stock Market (MERVAL) reached an all-time high of 15643 in July of 2016 and a record low of 0.03 in February of 1988. Good times for Argentina.
Something to note is that Argentina returned to the global debt market in April after a long spell of 15 years since they last defaulted. Argentina managed to pull-of $16.5Billion bond sales.
In the week Cote D’Ivoire ended on -2.8% followed by Bosnia at -2.1% and Zimbabwe at -2.1% as shown above.
Looking closely at Zimbabwe’s stock market, the top 10 companies by market capitalization have received a huge pounding. Companies such as Delta Corporation the largest by Market Cap is down by -6.35% year-to-date. The worst hit is Innscor Africa Limited down -42.75% year-to-date.
African Bond Markets
Have a look at the Bloomberg African Bond Index (ABABI) 1 year chart below, if you are seeking yield, African bonds will give you that exposure.
*The ABABI is a rules based weighted composite index of local A Sovereign Indices (South Africa, Egypt, Nigeria, Kenya, Namibia, Botswana). To be included in the index, a security must have at least 1 year remaining to maturity.
The yields on Mozambique’s $726 million of bonds due January 2023 are at record highs currently at 17.70 percent. Mozambique is facing huge credit risks and Fitch Ratings estimates that, when factoring in the discovered hidden loans, Mozambique’s government debt is equivalent to 83 percent of 2015’s gross domestic product.
The Kenyan $2 Billion Eurobond due in 2024 is currently trading at a yield of 7.3% with a 97.70 price.
Sources: (Kenyan Wall Street, Bloomberg, Trading Economics, Investment Frontier, AFDB)
