Monday, April 15, 2024 UTC

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Market Focus

African Equity Markets

Every month we select a fund manager, active in the African continent, to share his thoughts on the performance of African listed markets (equities or bonds). If you want to be featured in this section, get in touch via editor “at” africaglobalfunds.com

By S&P Global

January started how December ended for much of Africa, with North Africa setting the pace and West Africa going through a difficult time (S&P North Africa 15 up 8.27%; S&P West Africa 25 down 9.78%), and the continent overall delivering a marginally positive return. 

Egypt drove much of the performance in the north (up 17.12%), with Malawi also having a very strong start to the year (up 10.62%). Nigeria, Tunisia and Cote d’Ivoire incurred the largest losses for January.Ghana was the notable performer in Africa bonds markets (up 17.36%), although overall the continent was down for the month. The other markets performances were within touching distance of zero, other than Nigeria (down 18.79%)

Unfortunately, the South African equity market didn’t get off to a good start in 2024, with large-caps contributing to a poor month overall (S&P South Africa Composite Capped down 3.05%; S&P South Africa 50 down 3.59%). Information Technology, the best performing sector in 2023 (S&P South Africa Composite Information Technology up 41.31% 2023), made a solid start to the year and although it returned a modest 2.21% for January, it was the top sector for the month. Of the rest of the sectors, only Consumer Discretionary and Consumer Staples managed positive returns. Communications finished 2023 with a strong run, but its performance for the year was well into the double-digit negative returns. January saw this poor performance continuing (S&P South Africa Composite Communications down 14.83%) taking its one-year loss to over 31%. Energy also had a poor month (S&P Composite Energy down 12.92%) All of the ‘Alternatively Weighted’ indices incurred losses for the month, with Momentum (down 0.28%) and Low Volatility (down 0.51%) being the best of a bad bunch. Quality was one of the better factors in 2023 after a strong final quarter (S&P Quality South Africa +15.66% 2023; up 14.76% Q3 2023) however, it was the biggest loser for January with a negative return of 6%. Enhanced Value and Intrinsic Value also struggled and started the year under-water.

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