4 January 2016

Africa: Bad Year for African Bourses Prompts Investor Exit

Foreign investors suffered huge losses in most African stock markets in 2015, as the continent faced foreign exchange pressures and low commodity prices.

While investors in Botswana and South Africa recorded some gains in local currencies, weakening currencies against a strengthening US dollar resulted in heavy losses for foreign investors.

In rand terms, the JSE All-share Index was up 1.86% in the year 2015 but in US dollar terms, it suffered a 22.55% loss.

On December 9 2015 the rand hit a record low of R15.30 against the greenback after President Jacob Zuma surprised markets by removing finance minister Nhlanhla Nene from his post, replacing him with the relatively unknown backbencher David van Rooyen.

Before #NeneGate the rand had already depreciated by 23% versus the dollar

In pula terms, the Botswana Stock Exchange Domestic Company Index was up 11.59% but suffered losses of 3.89% in US dollar terms.

Zambia's LuSE All Share Index was 2015's biggest loser in dollar terms after dropping a massive 45.80%. In kwacha terms the loss was about 6.91%.

Copper slide hits kwacha hard

The kwacha fell by about 48% in 2015 against the dollar as plunging copper prices, a power crisis and the widening budget deficit weighed on the economy.

Other African markets to fall in dollar terms were the Nigerian Stock Exchange All Share Index which lost 23.43%, Kenya's FTSE NSE index down 23.58% and Ghana's GSE ALSI which tumbled 25.44%.

The Zimbabwean stock exchange, which trades in US dollar, was 29.45% weaker as most blue chip companies were weighed down by negative economic performance as well as policy and political uncertainty.

In recent years African markets have been one of the preferred destinations for funds shunning lower interest rates in the US, but all that has changed since the US Federal Reserve hiked interest rates.

Analysts say foreign investors - who are the biggest participants on most African markets - are seeking exit points due to developments at the foreign exchange market, low commodity prices and negative sentiments over poor corporate results.

Source: Fin24

South Africa

Massive Data Leak Exposes Personal Details of Millions

The sensitive private information of 30 million South Africans, contained in a massive data breach, appears to have been… Read more »

Copyright © 2016 News24Wire. All rights reserved. Distributed by AllAfrica Global Media (allAfrica.com). To contact the copyright holder directly for corrections — or for permission to republish or make other authorized use of this material, click here.

AllAfrica publishes around 800 reports a day from more than 140 news organizations and over 500 other institutions and individuals, representing a diversity of positions on every topic. We publish news and views ranging from vigorous opponents of governments to government publications and spokespersons. Publishers named above each report are responsible for their own content, which AllAfrica does not have the legal right to edit or correct.

Articles and commentaries that identify allAfrica.com as the publisher are produced or commissioned by AllAfrica. To address comments or complaints, please Contact us.