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Africa Financial Market Report – 24/10/2016 – Nimed Capital Limited

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Mauritius Entrepreneurs to Do Business in Ghana: The maiden session of the Mauritius Trade and Investment Forum held in Accra, where about 40 Mauritian entrepreneurs will discuss business opportunities with their Ghanaian counterparts. The event aims at strengthening bilateral trade and investment relation between Mauritius and Ghana. It will also be a platform for business meetings between entrepreneurs of the two countries. The meeting will feature Mauritian entrepreneurs looking for investment opportunities in Ghana in all priority sectors, including joint venture collaboration, strategic alliances, franchising, project financing among other businesses. The Mauritian investors would be interested in exploring business opportunities in the services, agriculture, energy, and infrastructure sectors as well as in the area of higher added financial services.

Central Bank expects Cedi to remain stable: The BoG expects the Cedi to remain relatively stable going forward on the back of a tight monetary policy stance that has seen the policy rate maintained at 26% and USD inflows from the recently issued US$750 million Eurobond and other funds. Investors and businesses would be satisfied with the relative stability of the Cedi, which posted a year-to-date depreciation of 4.1% against the USD at the close of September 15, 2016. However, the Cedi’s projection to continue to depreciate steadily against the USD to end the year at GHS3.98 due to insufficient USD supply to meet anticipated strong demand to settle end of Q3 2016 bills and restock for the final quarter of 2016. This should result in an overall depreciation of 4.7% against the USD in 2016 versus 15.7% depreciation in 2015 and 31.3% in 2014.

Nigeria’s inter-bank lending rate jumps to record high: The Central Bank of Nigeria has been tightening liquidity and intervening directly with dollar sales to banks. In order to support the ailing Naira, as the economy is currently receding due to the fall in oil prices. The inter-banking rate soared to a record high of 128% on Naira cash shortages after commercial banks funded their account with the CBN to participate in last Friday’s forward auction. Overnight rates opened at 100 per cent on Monday, traders said, after the money market ended on Friday with no deals as commercial lenders held onto Naira to be able to participate in the auction. The CBN held a two-month dollar forward auction on Friday to clear a backlog of demand from airlines, manufacturers and other companies, as the Naira crisis deepens.

Sh30bn infrastructure bond bids cause T-bills under subscription: The 15-year tenor infrastructure bond, the longest ever, was fully subscribed by investors, with the government taking Sh30.6 billion from the Sh35 billion offered by investors at a rate of 13.17 per cent. Bidding for Treasury bills fell for the first time in weeks as attention turned to the higher-yielding Sh30 billion 15-year infrastructure bond auctioned on Wednesday. Alongside, the Treasury failed to raise the full amount on offer from the 91 and 364-day T-bills, even though the interest rate on the latter rose slightly to 10.4 per cent from 10.3 per cent the previous week as the market remained static, with all eyes on the primary bond auction.

Africa Markets in Focus

Country 2016 GPD (USD ‘b) 2015 P GDP Growth (%) 2016 P GDP Growth (%) Credit Rating
Ghana 38.171 3.48% 4.53% B-/S&P, B/Fitch
Nigeria 537.966 2.65% 2.32% B+/S&P, BB-/Fitch
Kenya 64.688 5.59% 5.98% B+/S&P, B+/Fitch
Mauritius 11.865 3.37% 3.78% Baa1/Moody’s

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

Economic Rates

Country 91 Day T-Bill 182 Day T-Bill Inflation (%) Policy Rate (%)
Ghana 22.81% 24.45% 17.20% 26.00%
Nigeria 14.40% 18.68% 17.61% 14.00%
Kenya 7.67% 10.28% 6.34% 10.50%
Mauritius 2.43% 2.64% 1.00% 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 3.95915 -0.15805 -4.16%
Nigeria 196.899 313.664 -116.765 -59.30%
Kenya 100.529 99.642 0.887 0.88%
Mauritius 34.8304 34.2296 0.6008 1.72%

Source: Oanda

Stock Market Performance

Country Year End 2015 Week Close Week Change YTD Return (%)
Ghana 1,994.91 1,755.61 -239.30 -12.00%
Nigeria 28,642.25 27,596.82 -1,045.43 -3.65%
Kenya 145.7 135.79 -9.91 -6.80%
Mauritius 1,811.07 1,820.89 9.82 0.54%

Source: Various Stock Exchanges

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

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