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Africa Financial Market Report – 14/11/2016 – Nimed Capital Limited

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Ghana set to issue maiden 10-year domestic bond to ease rates: Ghana has demand it’s first 10-year domestic bond in an effort to restructure debt to ease interest rates and raise longer term funds to support government pending. The 2026 issuance, is open to non-resident buyers and will seek roughly 200 million Cedis. The pricing guiders are Barclays Bank Ghana, Stanbic Ghana and Strategic African Securities. In line with the IMF program, Ghana signed up to in 2015 to restore fiscal balance to the economy. With prudent economic management and reducing short-term debts to a sizeable amount, the financing gap in the economy could be narrowed. Positive effects felt in the long run by the private firms seeking debt financing.

Securities Africa Group sets up Kenyan subsidiary: Stockbroking and financial services firm, Securities Africa Group has launched a subsidiary, after it was granted a license by Kenya’s Capital Markets Authority (CMA). As well as being admitted as a trading participant at the Nairobi Securities Exchange. Kenya is the largest and most liquid regional market; thus it is an important entry point into the East African market when considering the securities in Africa. In order to position itself as the top brokerage firm, SAG would need a focused business plan that not only intends to have impact on the Kenyan capital markets, but across the African capital markets as a whole by leveraging their network of corporations, institutions, sovereign and retail investors.

Nigeria FG plans N6.8tn budget for 2017: In the 2017-2019 Medium-term Expenditure Framework and Fiscal Strategy Paper, the 2017 budget is estimated to be N6.8tn, 13.3% increase of the 2016 budget. Against the backdrop of the generally adverse global economic environment and the fiscal challenges in the domestic economy; thus the 2017 budget will hopefully restore the economy to a sustainable, inclusive growth path, with emphasis on job creation and private-sector investments. A projection of 3.02% in GDP growth and an expected moderation of inflation to 12.92% was also stated in the paper. Assumptions on crude oil, projected 2017 price per barrel to be $42.5, The Naira is expected to appreciate against the dollar, being pegged at N290 per dollar. With adequate financial management focusing on employment growth and labour productivity, the FG are confident in repealing the recession.

Africa Markets in Focus

Country 2015 P GDP Growth (%) 2016 GPD (USD ‘b) 2016 P GDP Growth (%) 2017 P GDP Growth (%) Credit Rating
Ghana 3.881% 42.761 3.337% 7.38% B-/S&P, B/Fitch
Nigeria 2.653% 415.080 -1.746% 0.65% B+/S&P, BB-/Fitch
Kenya 5.649% 69.170 5.987% 6.14% B+/S&P, B+/Fitch
Mauritius 3.500% 11.740 3.523% 3.90% Baa1/Moody’s

Source: IMF World Economic Outlook Database (Oct. 2016), GDP (P- Projected)

Economic Rates

Country 91 Day T-Bill 182 Day T-Bill Inflation (%) Policy Rate (%)
Ghana 22.50% 22.55% 15.80% 26.00%
Nigeria 14.51% 18.68% 17.70% 14.00%
Kenya 8.11% 10.30% 6.34% 10.50%
Mauritius 2.53% 2.68% 1.50% 4.00%

Source: Various Central Banks.

Exchange Rates (Local Currencies against the USD)

Country Year Open 31-Dec-2015 Week Close YTD Change YTD (%)
Ghana 3.8011 4.003 -0.2019 -5.31%
Nigeria 196.899 316.063 -119.164 -60.52%
Kenya 100.529 99.842 0.687 0.68%
Mauritius 34.8304 34.2458 0.5846 1.68%

Source: Oanda

Stock Market Performance

Country Year End 2015 Week Close Week Change YTD Return (%)
Ghana 1,994.91 1,679.41 -315.50 -15.82%
Nigeria 28,642.25 26,170.88 -2,471.37 -8.63%
Kenya 145.7 140.01 -5.69 -3.91%
Mauritius 1,811.07 1,787.88 -23.19 -1.28%

Source: Various Stock Exchanges

Download Full Report: https://nimedcapital.com/nimed-research-weekly-25-jan-2019/

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