By Dipo Olowookere
Local currency and equity markets in Africa have been experiencing poor run since last month and this is becoming worrisome to observers.
While some analysts attribute this to foreign investors pulling out of their funds from the markets as a result of rise in US yields, others believe political uncertainties in Africa have caused the panic withdrawal of international funds from the market.
A report by Bloomberg said despite Brent crude’s 15 percent rise in 2018 to about $80 a barrel, the Nigeria’s currency is under pressure for the first time this year.
The Naira has fallen to its weakest level since November on the black market and foreign reserves halted their continuous rise since September.
Also, the Nigerian Stock Exchange (NSE) All-Share index (ASI) is near a five-month low as international funds reduce their exposure, according to Exotix Capital.
It was observed that most African currencies have weakened since the end of March and while South Africa’s Rand was hit early on, other less-liquid currencies are also under pressure. Most have reversed or pared the gains against the dollar they posted in the first quarter.
Zambia’s kwacha, in particular, is struggling. It’s weakened 8.9 percent since the end of March, among the worst globally. While investors were previously attracted by the kwacha’s carry returns, they’re now exiting a country struggling with what the International Monetary Fund described as a debt problem.
Egypt, Ghana and Kenya are also showing strain. Egypt’s stocks, which had risen steadily since the pound was devalued in November 2016, have fallen more than 9 percent since late April.
Ghanaian equities were world beaters in the first quarter, but have since slipped along with the cedi, as have Kenya’s shilling and stocks.
more recommended stories
Guinea Insurance Seeks More Time to File FY 2018, Q1 2019 Results
By Dipo Olowookere The management of.
FarmCrowdy, Livestock247 Partner to Boost Trading
A partnership aimed to deepen the.
Why You Should Consider Investing in Eurobond Funds
By United Capital Research Last week,.
Zedcrest Capital’s Amzat, Others to Speak at Lagos FINTECH Week
Group Managing Director of Zedcrest Capital.
Buhari to Empower 10m Traders, Farmers During Second Term
By Modupe Gbadeyanka No fewer than.
Africa Prudential Considers New Ventures to Improve Earnings
By Modupe Gbadeyanka Managing Director/CEO of.
Team Ren Excalibur Wins Renmoney’s Hackathon
By Modupe Gbadeyanka One of Nigeria’s.
Unilever Nigeria Revenue Drops to N19bn in Q1 2019
By Dipo Olowookere Lagos-based Fast-Moving Consumer.