It felt a bit like a mid-January deja-vu this week with equities and commodities getting crushed, the dollar rallying, and much talk about a change in monetary policy. Global stocks mostly fell on Thursday as uninspiring economic data and lower oil prices weighed on sentiment. A flurry of data painted a weaker-than-expected picture of the U.S. economy, however, stocks showed a rally later on news that US oil rig count fell by 15 this week, lifting oil prices from session lows. On top of that, traders remained mostly cautious with many leading markets closed on Friday and Monday for the Easter weekend holiday…
NGSE ASI increased by 0.80% this week moved by a strong news flow. Monday, President Buhari stated that the foreign-exchange squeeze being faced by the country is a “temporary phase” to be overcome when structural problems are addressed. The next day, the Monetary Policy Committee unexpectedly increased the benchmark rate by 100 basis points to 12%, concerned by the rapid acceleration in inflation as the central Bank governor pledged to maintain “currency stability”. Finally on Wednesday, Nigerian lawmakers approved President Buhari’s proposals to spend a record 6.08 trillion naira ($30.5 billion) in 2016 to help the economy ride out the oil slump. The spending plan factored in oil at $38 per barrel and projected output of 2.2 million barrels a day. The country which depends on crude exports for more than 90% of foreign income and two-thirds of government revenue, has been facing dollar shortages since oil prices tumbled from their 2014 peak. The central bank denied foreign-currency access to a range of goods and kept the naira at 199 to a dollar for more than a year, using currency controls. More and more investors are putting pressure on Buhari to devaluate the currency but the latter has not given up yet.
EGX 30 increased by 0.84%. The index was moved mainly by the latest cabinet reshuffle as Egyptian president swore in 10 new ministers. The index broke the barrier of 7,500 points this week.
JSE ASI plunged by 2.79% as political tensions continue to weigh on sentiment already affected by the country’s weaker economy. A special South-African police unit said it is considering whether to investigate corruption charges against the influential Gupta family after allegations were made that they personally offered Deputy Finance Minister Mcebisi Jonas the job of taking over the finance ministry last December when the seat was made free by South-African’s president. The Gupta family is friend of President Jacob Zuma and the family happens to be in business with his son.
All in all, quieter time than seen last week on African markets as investors embraced the first big holiday season of the year, Happy Easter!
