ssa market commentary
Oil prices rose on Monday after top exporters Saudi Arabia and Russia reaffirmed their commitment to extra voluntary oil supply cuts until the end of the year. Brent crude futures rose $1.03, or 1.21%, to $85.92 a barrel by 0834 GMT, while U.S. West Texas Intermediate crude was at $81.58 a barrel, up $1.07, or 1.33%
KENYA: Foreign Investor Exodus Impacts Nairobi Securities Exchange
Foreign investors withdrew Sh1.18 trillion from the Nairobi Securities Exchange (NSE) between July and September 2023, a decrease from Sh1.5 billion in the second quarter. The exit impacted the NSE, causing a third consecutive quarterly decline in its value. The top five NSE-listed companies saw their market capitalization drop by Sh101 billion, with foreign investors seeking safer alternatives due to the devaluation of the Kenyan shilling. Despite these challenges, the Capital Markets Authority remains optimistic that foreign investors are gradually regaining confidence in the market, as reflected by occasional net inflows.
NIGERIA: Banks Report Soaring Profits Due to Naira Depreciation
Leading Nigerian banks have reported extraordinary profits, with a staggering profit before tax of N2.292 trillion in the first nine months of 2023. Foreign exchange revaluation gains from Naira depreciation contributed significantly, accounting for 63.6% (N1.457 trillion) of the total profit. This marks a 546.5% increase in forex-related profits compared to the same period in 2022, reflecting a robust 156.4% growth in total profit. The surge in profits is primarily attributed to the depreciation of the Naira.
GHANA: Ghana’s Vice President Secures Nomination to Contest 2024 Presidential Election
Ghana’s Vice President, Dr. Mahamudu Bawumia, secures the ruling New Patriotic Party’s (NPP) nomination for the 2024 Presidential Election. He will compete against former President John Dramani Mahama, who seeks a return to power after ruling from 2012 to 2016. Dr. Bawumia, with extensive experience in government and finance, aims to transition from his role as Vice President to President, but faces a formidable opponent in Mahama, known for his political experience as a former President, Vice President, and legislator.
EGYPT: Egypt Secures $5.5 Billion in Loans, Boosts Investor Confidence
Egypt is set to obtain $5.5 billion in loans from global partners and institutions, with a $1.5 billion financing package in the final stages and potential $4 billion from partners like the IMF. This aligns with Egypt’s diversification strategy, including Panda and Samurai bonds, signaling trust in its economic policies.
ETHIOPIA: Ethiopia Faces Default Risk as Debt Woes Deepen
Ethiopia’s precarious financial situation has led Fitch Ratings to downgrade the country’s credit rating from CCC- to CC, signaling a high likelihood of default. The report highlights a deteriorating external liquidity position and significant external financing gaps as key contributors to the risk of default. Ethiopia’s debt burden, exceeding half of its GDP at USD 111 billion, includes over USD 28 billion in external debt, with 70% owned by the central government. As debt restructuring efforts continue, including a one-year debt service suspension offer from China, Ethiopia remains in dire need of financial support to avert a looming default on its debt obligations