A positive sentiment gained the global market this week with the Dow Jones and the S&P 500 reaching new records. Better-than-expected economic data from China following strong performance in the US somewhat lifted sentiment. Chinese data and expectations of more stimulus or measures to support western economies amid a low-rate environment are supportive for high-yielding African markets assets.
NSE ASI fell 1.92%. Fitch rating agency downgraded shilling this week due to Kenya’s strong exposure to exchange rate movements implying higher cost of international debt. The exposure is in the dollar-denominated debt Kenya holds or may raise in future. This comes after the rating agency classified the country’s outlook as negative last year and warned of the possibility to downgrade the local currency.
NGSE ASI remained fairly stable adding 0.17%. In its recent 2016 Ratings Review of Nigerian Banks, Fitch affirmed Diamond Bank’s ‘BBB’+ rating with stable outlook for Diamond Bank’s short-term and long-term Foreign Currency Issuer Default Ratings.
First Bank of Nigeria Ltd's and United Bank for Africa's the Long-Term Foreign Currency Issuer Default Ratings were downgraded to 'B' from 'B+. Besides, The Outlook on the Long-Term Foreign Currency IDR of Guaranty Trust Bank was revised to stable from negative due to continuing strong earnings and stronger-than-expected liquidity. In other news, dollar scarcity continued in the country sending the Naira to fall to NGN363 against the dollar at the parallel market on Thursday.
EGX30 surged 5.57%. The Egyptian benchmark index ended the week at a rise, especially after the Central Bank of Egypt's decision to stabilise the Egyptian pound against the dollar. Indeed, while the Central Bank is yet to make an official announcement, two treasury sector officials have stated that the dollar's price remained unchanged in the latest regular forex auction, at EGP 8.78.
DSE ASI was fairly stable at 0.24%. Dar es Salaam Stock Exchange (DSE) share price rallied by 100 per cent to 1,000/- each immediately after self listing as was predicted. This was double the price offered during the initial public offer.
