Market Commentary

Overall, African equity markets started 2021 on the right foot. Most markets posted positive returns for the first week of the year. 

African equity markets performed strongly this week with some markets posting gains above 5% week-on-week. This echoed a strong week on global markets where major indices reached all-time highs and the bitcoin even broke above the 20,000$ bar. Markets seemed to be boosted by the progressive rollout of vaccines in the UK and the US, as well comments from the Fed. Hopes of advances in stimulus talks in the US also fueled positive sentiment among traders through the week, although on Friday markets closed down on signs that outstanding issues on this front remained.

African equities performance was mixed this week with each market reacting to their own set of local factors, while markets in the US, Europe and Asia, were mostly down for the week. Global markets seem to have reacted negatively to unsteady progress toward another covid-19 relief package in the US, unsuccessful negotiations to date on Britain’s trade relationships with the European Union, and were not particularly excited by the ECB extended its bond-buying program.

This month, African markets have been marked by Four East African countries: Rwanda (RSE), Uganda (USE), Tanzania (DSE), and Burundi, who have finally merged their stock markets through a decade-long automation project to attract investment. It is a project that has been in the making since 2011 when countries from the region embarked on integrating their stock exchanges. The technology platform dubbed the EAC Capital Markets Infrastructure (CMI), developed by a Pakistan-based private firm, will basically interconnect all the region’s trading systems: Through the platform, investors in the four countries will be able to buy and sell shares of companies listed in any of the countries without going through different stakeholders.