9 November 2023

Market Commentary

After hitting four-month lows, oil prices rebounded on Thursday due to fears of a global crude demand slowdown. Brent oil futures were $80.16 a barrel, while West Texas Intermediate crude futures were $75.82 a barrel by 08:49 GMT.

KENYA: Bear Market Boosts Bank Dividend Yields to Double Digits
NSE’s extended bear run lifts Standard Chartered Bank Kenya’s dividend yield to 14.5%, Co-operative Bank at 14.5%, I&M Group at 12.9%, and Stanbic Holdings at 12.4%. Despite falling stock prices, listed dividend-paying banks average a 12.3% yield, surpassing returns from fixed deposits and rental properties. Improved earnings in 2022 led to higher dividends for most banks, with Standard Chartered Bank increasing its payout from Sh19 to Sh22. However, caution is advised as high dividend yields may result from declining stock prices and deteriorating fundamentals.

NIGERIA: China-Nigeria Bilateral Trade Hits $17.25 Billion in Q3 2023
China remains Nigeria’s largest global source of imports, with a 22.5% increase in imports compared to last year. The Consul, General Yan Yuging, reveals Nigeria’s significance as China’s second-largest trade partner in Africa. Chinese investments, exceeding $1 billion, focus on manufacturing, particularly in steel, automobiles, machinery, electronics, and daily necessities. Notable projects include the Lekki Deep Sea Port, Dangote Refinery, Lagos Blue Line Light Rail, Lagos International Airport, and Lagos-Ibadan Railway, contributing significantly to local economic and social development.

GHANA: Government’s Debt Restructuring Yields $2 Billion in Savings
The government’s decision to suspend external debt servicing results in temporary savings of $2 billion from January to September. The move transforms a previous deficit into a $859.1 million surplus in the current account. The local currency sees minimal depreciation of 2.5% from February to September 2023. Governor of the Bank of Ghana, Dr. Ernest Addison, attributes the improvement to reduced external debt service payments. The government targets $10.5 billion in overall savings to bring debt levels to 55% of GDP. Rule-based monetary policy urged for stability

EGYPT: Egypt Targets $2.27 Billion in Revenue from Privatisation in FY 2023/2024
The government aims to collect EGP 70 billion through its privatization program, part of a broader plan to generate EGP 4.349 trillion in revenue. In FY2022/2023, $99 billion was secured from various sources, including exports and tourism. The government collected $5 billion from selling stakes in 13 companies and plans to attract an additional $5 billion through power plants and state-owned companies. The privatisation initiative, aligned with the State Ownership Policy Document, supports the IMF loan program, although challenges persist with the first review delay.

TUNISIA: Despite Energy Pressure, Tunisia’s Economy Shows Resilience
Trade balance deficit reduced by 28.05% to -13,979.3 million dinars in the first nine months of 2023. Inflation dropped to 8.6% in October, the lowest since August 2022. The Dinar declined against the euro but rose against the Dollar. Money Market Rate saw a slight decrease in October, marking the first in six months at 7.99%. Tunisia Investment Authority reported 21 projects with a total investment of 1586 MD by September 2023, a 3% decrease. Energy trade balance deficit decreased by 2%, and food trade deficit narrowed to 768 MD

by fixed income research team