SSA Equity Market Outlook: At the Mercy of New Reforms


Friday, July 26, 2019   / 03:00PM / United Capital Research / Header Image Credit: IOL


Over H1-19, equities in global, emerging and frontier markets bucked the 2018 bearish trend. This was as most indices ended in the green territory on the back of the global easing narratives. However, most equities in the Sub-Saharan Africa (SSA) region underperformed their emerging and frontier market peers, as FPIs piled into high yielding debt instruments within the region. Of the six exchanges under our watch, only the South African and Kenyan bourses closed H1-19 in the positive territory. The performance in Kenya was buoyed by its strong economic growth while the depth of the South African market and the continued reassurance by the President to commit to reforms, provided investors with some fundamental justifications for buying South African equities.

Looking ahead, we believe the outlook for emerging and frontier market equities will remain positive through H2-19 on the back of the expectation for a more dovish global monetary policy. For SSA, we expect interest in equities to remain fundamentally driven as the heavy-weight market movers – FPI – continue to look for bold economic reforms as a fundamental reason for buying equities. Thus, in the absence of any new reforms in H2-19, we expect sentiments to remain similar to that of H1-19.


Top African Stories

Zimbabwe central bank eases forex rules for fuel, chrome miners: Zimbabwe’s central bank said oil firms, chrome miners, embassies and international organisations could conduct local transactions in foreign currencies, as the country battles an acute dollar crunch and soaring inflation. Reuters


IMF says Egypt can draw final $2 bln from $12 bln loan program: The International Monetary Fund said on Wednesday its board completed the fifth and final review of Egypt’s $12 billion loan program, allowing authorities in Cairo to draw another $2 billion in funds. Reuters


Namibia plans to add 220 MW to electricity grid by 2023: Namibia’s power utility NamPower plans to add 220 MW in new electricity capacity by 2023, as the uranium-producing southwest African nation seeks to wean itself off imports.  Reuters


S.Africa's Momentum Metropolitan to buy Alexander Forbe's short-term insurance unit:  South African insurer Momentum Metropolitan is to acquire the short-term insurance business of financial services group Alexander Forbes for around 1.94 billion rand ($138.68 million), the two companies said. Reuters

Guinea seeks developers for Simandou iron ore deposit: Guinea has launched an international tender for blocks 1 and 2 of Simandou, giving companies until Aug. 2 to outline their bids, as the country seeks to revive interest in the world’s largest undeveloped iron ore deposit. Reuters


Nigeria, Siemens agree roadmap to increase power: Nigeria and German company Siemens have agreed a roadmap to increase Nigeria’s “reliable” power supply to 11,000 megawatts by 2023. Reuters


Looking Forward


Policy Rate Decision - July 26th



May-19 Trade Balance- July 31st



Jul-19 (CPI) Inflation - July 31st



Jun-19 Private Sector Credit - July 29th


South Africa

Jun-19 Private Sector Credit - July 29th

Q2-19 Unemployment Report - July 30th

Jun-19 Trade Balance - July 31st



Policy Rate Decision - August 18th



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