Kenya And Uganda, Best Performing Stock Markets In Sub-Saharan Africa

In the face of economic challenges sweeping across Sub-Sahara Africa including the weakening of local currencies in the face of the US Dollar, a select group of stock markets has defied all expectations, shining as beacons of hope for investors seeking growth and stability.

The select SSA markets closed the week ended 22nd March 2024 on a net bullish position. Kenya and Uganda were the best-performing markets printing a 5.7% w/w gain. Egypt, on the other hand, closed the week as the laggard, shedding 7.2% w/w.

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The NSE, which has been doing well despite the bolting of foreign investors, is currently eyeing counties and parastatals to revive the corporate bond market, with talks between the Nairobi bourse at various sub-nationals at an advanced stage.

Issuance of bonds by sub-national bodies, together with the launch of a hybrid over-the-counter (OTC) bond trading platform, is one of the ways the NSE plans to increase liquidity in the secondary market of fixed income.

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Historical Outlook of SSA

The stock markets in Sub-Saharan Africa have been underperforming across the different market development measures even before the global financial crisis in 2008.

The Nigerian Stock Exchange (NGSE), the Johannesburg Stock Exchange (JSE), and the Nairobi Security Exchange (NSE) have been identified as the major frontier markets in Sub-Saharan Africa as they are often the first stop for foreign investors who want to penetrate the Western, Southern, and Eastern African stock markets respectively.

Also, these three markets are the largest in Sub-Saharan Africa based on GDP and market capitalization as of 2020. At the end of 2020, South Africa had a nominal GDP and market capitalization of US$415.32 billion and US$1.05 trillion respectively, Nigeria had a nominal GDP and market capitalization of US$480.48 billion and US$56.6 billion respectively, and Kenya had a nominal GDP and market capitalization of US$ 109.49 billion and US$21.4 billion respectively.

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