The frontier markets recorded a 0.1 per cent growth in the second week of June; lower than 1.1 per cent increase booked by Emerging Markets and 0.4 per cent growth posted by the world markets. Frontier markets are in developing economies such as Kenya, Tanzania, Ethiopia, Rwanda, Ghana, Nigeria, and Angola. The markets are often small, risky, and illiquid.
Kenya’s equity market dropped by approximately 0.4 per cent in the period under review.
The proposal by the Treasury Cabinet Secretary to remove the law on interest rate limits caused mixed reactions among investors. Although the shareholders hope that the law is repealed, they are uncertain whether parliamentarians will remove the regulation or keep it. It is the second time the CS has made the proposal to lawmakers.
According to a report by Citi, the proposal to increase excise duty on wines and spirits may have mixed effects on beer manufacturers such as EABL. The regulation could lead to a decline in the consumption of spirits or it could redirect spirit consumers to buy more beer.
Most other frontier markets in Africa like Nigeria, Tunisia, and Morocco also posted a decline in June. The drop in performance in frontier markets is a shift from the 5.39 per cent growth recorded at the start of March 2019.
