JSE rated highest but Cairo a top investment choice


Johannesburg Stock Exchange

from OKORO CHINEDU in Lagos, Nigeria
LAGOS, (CAJ News) – THE Johannesburg Stock Exchange (JSE) has been rated as the best performing bourse in the continent (Africa) this year.

However, the favoured African market for the offshore community remains Cairo in Egypt.

FBN Quest, the market watcher, said of the three sub-Saharan Africa (SSA) stock markets it periodically covered, the Johannesburg all-share index(JSEASI) has performed the best this year.

“Nairobi, (Kenya) has been the laggard by some distance,” FBN Quest stated.

“As the global economy has risen off the floor, so has the JSEASI picked itself up.”

The market watcher stated that by virtue of its liquidity and transparency, the market had developed into a barometer of broad emerging market(EM) sentiment.

According to FBN Quest, this explains its loss of 6 percent year-to-date (ytd) when the economy is heading for a 7,2 percent gross domestic product (GDP) contraction.

“It also explains the dumping of South African assets, the rand above all, at times of EM headwinds.”

Meanwhile, turnover has averaged US$6,8 million ytd in Nairobi and $10,9million in Lagos(NSEASI), compared with $1 billion on an average day in Johannesburg.

Analysts struggled to explain why the NSEASI (down 7,5 percent ytd) has performed so much better than Nairobi (down 27 percent.

The GDP figure this year is projected to be the worst since the 1980s.

According to FBN Quest, reforms are elusive, and Nigeria’s status as a frontier market with Member of Chartered Institute for Security and Investment (MSCI) is under discussion.

“The crashing oil price has again highlighted the weakest point of the sovereign credit story.”

Why Cairo is an investment destination of choice has been explained.

“The healthy growth and the reforms are important,” FBN Quest stated.

The most valued, however, is the fact that the government has successfully concluded its latest International Monetary Fund (IMF) programme and promptly applied for a follow-up.

“Further afield, the favourite would be Vietnam.”

– CAJ News

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