Market Commentary

Oil prices ticked higher on Monday after China took steps to support its flagging economy, though investors remained worried about the pace of growth as well as further U.S. interest rate hikes that could dampen fuel demand. Brent crude rose 19 cents, or 0.2%, to $84.67 a barrel by 0627 GMT, while U.S. West Texas Intermediate crude was at $80.09 a barrel, up 26 cents, or 0.3%.

KENYA: Nairobi Stock Exchange Sees Investor Wealth Halve After Record High
Investor wealth at the Nairobi Securities Exchange (NSE) has dwindled by half since its peak valuation of Sh2.9 trillion exactly two years ago, a consequence of foreign investor exodus. The bourse reached its zenith at Sh2.94 trillion on August 24, 2021, driven by Safaricom’s share surge to Sh44.95. However, Safaricom’s decline to Sh15.95 per share has led to a market-wide drop. This decline has resulted in a total loss of Sh1.38 trillion, leaving investors with Sh1.56 trillion. This emphasizes the risk of overreliance on a few stocks. The decline might discourage potential investors crucial for the exchange’s revival.

GHANA: Ghana Among 16 African Nations with Worsening Operational Risk- EIU Report
The Economist Intelligence Unit’s latest Operational Risk Outlook has revealed that Ghana is one of the 16 out of 51 African countries whose operational risk has deteriorated between late 2022 and mid-2023. The main driver behind this decline is the weakening macroeconomic risk subcategory. The negative impact of increasing domestic consumer prices on business profits, along with broader implications for exchange rates and monetary policy, contributes to this trend. Despite challenges from the Russia-Ukraine conflict and the lingering effects of the COVID-19 pandemic, the macroeconomic risk remains the top-rated subcategory across the region, driven by robust economic growth due to population expansion. Conversely, 11 countries are experiencing an improved risk outlook, attributed to country-specific factors such as stabilization efforts in Ethiopia and an IMF deal secured by the Central African Republic. The report also underscores concerns of potential financial sector distress due to high public debt and limited banking oversight in the region.

NIGERIA: Nigerian Stock Market Maintains Bullish Stance Amid Sluggish GDP Growth
Despite a lackluster 2.51% GDP growth in Q2 2023, the Nigerian stock market remains bullish. The Nigerian Exchange Limited’s All-Share Index (ASI) climbed 1.3% WoW to 65,558.91 points, propelled by BUA Foods (up 7.9%), Dangote Sugar (35.7%), and Transcorp (39.4%). This bolstered the Month-to-Date (MtD) and Year-to-Date (YtD) gains to 0.6% and 26.3%, respectively. While trading volume surged by 7.3% WoW, trading value dipped by 0.4%. Sector-wise, the Consumer Goods Index surged by 11.6%, the Insurance Index by 1.20%, while the Banking Index contracted by -3.6%, and Oil and Gas Index by -2.4%; the Industrial Goods Index remained steady.

EGYPT: Egyptian Exchange Hits Record High with New Chairman; Gold Prices Decline
Starting the week with momentum, the Egyptian Exchange achieved a record high as the newly appointed chairman assumed office. The EGX30 benchmark index surged by 1.7 percent, reaching an unprecedented 18,516.59 points. Meanwhile, gold prices experienced a decline. Market indices painted a positive picture with EGX70 closing at 3,741.03 points, up 1.05 percent, and EGX100 growing by 1.13 percent to 5,505.36 points. Market capitalization soared by EGP 17 billion, surpassing EGP 1.256 trillion. Egypt for Poultry made significant gains, rising by 19.71 percent, while Obour Land For Food Industries faced the most significant loss, dropping 3.21 percent. Gold prices fell slightly, with 24-karat gold sliding to EGP 2,554.25 per gram, 21-karat to EGP 2,235, and 18-karat to EGP 1,915.75. The official exchange rate remained stable, with EGP 30.83 for purchasing and EGP 30.96 for selling against the dollar. The euro stood at EGP 33.299 for purchase and EGP 33.447 for sale, while the Saudi riyal was priced at EGP 8.22 for purchase and EGP 8.25 for sale