African Stocks record sterling returns among top global exchanges



Thursday, March 14, 2013/ The Analyst





1.    G7 countries compared

2.    BRIC countries compared

3.    Ten best performing stocks in the world

4.    Global stock markets - overview

Who would have believed it - if you were told that the Kenyan stock exchange has the highest return in the world in the year to date; and that the Nigerian ASI will be the bourse with the third highest return to date?

Okay, we are not getting ahead of ourselves here, or are we? Now you can see what all the buzz about Africa is all about. It is beginning to show up in the performance of the exchanges; and Nigeria is yet to break out with new listings.  


Whilst the Dow Jones and S&P 500 are on track with double-digit YTD returns for the year 2013; the returns are relatively low when compared with returns from other foreign markets.

Majority of these markets are benefitting from the reforms embarked upon in respective markets subsequent to the global financial crisis; even as a few economies are still reeling under the post effects.

A cursory review of the stock markets of the G7 countries (see below) reveals that six (6) bourses currently posts positive YTD returns while one (1) - the Italian market, recorded a negative YTD return. Leading the pack was the Japanese market with +19.11% YTD gains while expectedly, the Italian market came last with a -3.24% YTD losses.

Analysts remain unsurprised by the negative return posted by Italy given that Fitch Ratings recently downgraded the nation’s credit ratings by one level to BBB+ with a negative outlook.


A similar look at the stock markets of the BRIC countries revealed that the Chinese market has so far recorded positive YTD gains of +0.05% while the remaining members recorded negative YTD losses. The Brazilian and Russian markets dominated the negative positions with -5.85% and -2.01% losses respectively.



Ten Best Performing Stock Markets in the World  

1. Kenya All Share Index (YTD): 24.41%


Kenya’s equity market is rising as a haven for frontier market investors, giving tough competition to peer sub-Saharan Africa economies such as Nigeria. This positive outcome was driven by voracious appetite for stocks by foreign investors coupled with other factors that have also contributed to the positive condition which include;

·         A stabilized currency which was formerly weak;

·         Growing fuel prices; and

·         A rush forward in local liquidity prompted by heavy bank lending to the private sector.

Source: Gateway to Africa

             2. Argentina MerVal (YTD): 21.26%


The Argentina Stock market had a positive YTD performance which has currently placed it as second best in the world. The factors driving the market cannot be specifically ascertained but the decision of the US Congress to avoid spending cuts and tax hikes that threatened to push the world's largest economy into recession can be one of the factors fuelling the positive outlook.

Source: Trading Economics, Wall Street Journal

  3. Nigerian Stock Exchange (YTD): 19.70%


Nigeria is the third most rewarding stock market in the world in 2013 as investors would have collected 19.70% YTD return on investment from the bourse. The current growth recorded can be attributed to the reforms put in place by the regulatory authorities that are now responsible for the gradual return of investors’ confidence to the market and such reforms include;

·         The introduction of market-making;

·         Sustained patronage by foreign investors;

·         Impressive corporate financial results by listed companies; and

·         Extension of trading hours.

Source: Proshare

  4. Japan Nikkei 225 (YTD): 19.11%


The uptrend recorded in the Japanese market can simply be linked to the effort of the government to drive the economy out of deflation as foreign investors now buy more of Japanese equities. Another factor is the appointment of new governor of the bank of Japan which is expected to take bolder policy measures to boost the ailing economy.

Source: Reuters

       5. BRVM (YTD): 16.18%


BRVM is a regional bourse based in Ivory Coast and the factors which have prompted its positive result so far in 2013 can simply be linked to the followings: Lengthening exchange hours to advance its performance– to a six-hour trading day; Urging smaller companies to list; and·         Supporting a tie up with neighboring exchanges.

Source: Venture Africa

          6. Philippines PSE Composite (YTD): 15.01%


The Philippines stock market has recorded +15.01% YTD gains in 2013 as the exchange which is said to be on the way to achieving the status of a world-class bourse has implemented the following reforms which might have yielded the recent return and they include

· The Board of PSE has extended the hours of trading to adapt to international standards; and

· It is also implementing rules and regulations for the introduction of Exchange Traded Funds [ETFs].

Source: Manila Times


      7.Swiss Market (YTD): 14.05%


The Swiss market has recorded 14.05% YTD gains so far in 2013. The market also recently closed at a new multi-year high. This simply suggests that it’s now breaking new grounds after the global financial crisis.

Source: RTT News


     8.US-Dow Jones Ind. Ave (YTD): 11.73%


The Dow Jones continues to move higher with +11.73% YTD gain as more workers are hired. Other factors fuelling the uptrend include

·         Expanding economy; and

·         soaring consumer demand


    9.US-S & P 500 (YTD): 10.84%


The situation in Dow Jones also applies here as the S & P and Dow Jones are both traded in the US.

Source: FXStreet

10.Jakarta Composite (YTD): 10.68%


The Jakarta Composite has so far recorded +10.68% YTD gains in 2013 with large foreign investors’ capital inflow to the domestic stock market in the first two months of 2013 being the responsible factor.

Source: Indonesia Finance Today 


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