A very very very quiet beginning of the year on African markets… I wonder how long it will last. Starting the year like we ended it somehow with the MASI and the EGX30 at the top of the performance.
The MASI is the best performer of the week gaining 7.63%. The Central Bank expects the economy to expand by 4.2% in 2017 from 1.2% last year and the inflation is projected to fall to 1% from 1.6% in 2016. Moreover, the Central Bank approved for the first time in the country five Islamic banks: Attijariwafa, Banque Centrale Populaire, BMCE Bank of Africa, CIH Bank and Credit Agricole du Maroc. Islamic finance is considered as a growth prospect in the region.
The EGX30 pursued its strong performance during the first week of 2017, still muscled by a strong appetite from investors following the devaluation of the Egyptian pound in November. The benchmark increased by 3.88%.
Heavyweight shares such as Naspers and Richemont with strong ties to the Chinese economy pushed the JSE ASI higher towards the end of the week. The benchmark gained 1.11% as China presented strong manufacturing and services data.
In Nigeria, Shell closed the Trans Niger oil pipeline this week following a fire. This comes after Nigerian output has already suffered several disruptions last year. Nigeria’s December output dropped to 1.45 mn barrels. The NGSE ASI lost 2.32%. On a positive note, Access bank stated that it expects a recovery in Nigeria’s non-performing loans from the second half of 2017.
The NSE ASI lost 2.68%. A Kenyan government agency cautioned that the drought which affected the country’s agriculture could negatively impact the country’s economy. Agriculture is a key growth driver for the country and makes up around 25% of the economy. The National Drought Management Authority expects the drought to be strong. This could increase inflation in a nation where local currency has been weakening. The government targets 7.5% inflation. In December, inflation reached 6.4%.
