On the African continent, the week of August 4-10 reaffirmed power dynamics. The ruthless hierarchies describe financial markets often lacking liquidity and … courageous reforms.
In this stagnation, Johannesburg (JSE), a giant with over USD 1.23 trillion, remains the stock market Amazon: 8 to 10 billion USD exchanged each week, volumes that most exchanges do not see in a quarter. Casablanca, with 70 billion USD, third behind Egypt, continues to attract institutional investors and alpha hunters facing the limits of a market still too national. Nigeria (USD 60 billion) remains essential, but focused on a few big players – for the rest, the pond is calm. Kenya exceeds USD 18 billion, boosted by a reform that allows buying a single share: finally allowing small investors in, who were previously kept behind the glass. Ghana, on the other hand, is breaking the bank: +94.55% in dollars since January, tripling in two years, like a SpaceX rocket… let’s hope there is a parachute. The BRVM is capped at USD 13 billion, caught between pre-election caution and lack of depth, even though NSIA Bank CI’s multi-currency securitization (USD 82 million) proves that surprises are still possible.
The week in numbers
– JSE (+3.18%, YTD +19.93%): recovery in financials; Nedbank continues its “I’m leaving… but not yet” from Ecobank. Shoprite gets rid of Ghana and Malawi to refocus.
– Casablanca: progress at a slow pace, market capitalization frozen at USD 70 billion.
– Nigeria (+3.18%, YTD +41.61%): insurance companies in trance (Mutual Benefits +60.44%), BUA Foods and Dangote cement the rise; MTN plunges (-4.17%).
– Kenya (+1.41%, YTD +30.54%): historic reform, open door to small capital.
– Ghana (+5.60%, YTD +94.55% USD): rally post-rate cut (-300 bps), MTN Ghana +10.70%.
– BRVM (-0.44%, YTD +12.93%): Alios Finance +31.40%, Vivo Energy CI +9.66%, but CIE and SETAO pull down.
Off the radar, Malawi remains a statistical miracle (+8.25% for the week, +147.35% YTD), while Algeria increases its market capitalization by 43% in six months, without knowing yet if it is the rising tide… or just a gust of wind.
Liquidity, the lifeblood of the river
Reducing transaction costs is the ultimate test. Exchanges that resolve to do so will see volume and liquidity flow in. The others will remain dry season rivers: they will keep their rentier brokers, but lose their fish to deeper pools.
In the stock market, it is not rumors that create value, it is information. Even though they describe the past (especially if published three to 6 months after the exercise), balance sheets are the market’s compass, and dividends are the ultimate information: the signal that money is there, not just on paper. Soaring without a fundamental correlate? That’s called poker, not finance. Yet, how many African companies still publish their results? Too few.
