Nigerian equities posted the biggest gains in sub-Saharan Africa in April, helped by a reversal of investor flows that’s seen the market benefit at Kenya’s expense for the first time in 16 months.
The Nigerian Stock Exchange All Share Index rallied 9.3 percent this month, the most among 14 gauges on the continent, and the steepest gain since May 2013. The FTSE NSE Kenya 25 Index is down 0.6 percent in April, its first retreat in six months. It marks the first time since December 2013 that the measure has declined while Nigeria’s index has risen.
Nigerian assets soared after President Goodluck Jonathan conceded defeat to former military ruler Muhammadu Buhari on March 31, soothing fears of a dispute in Africa’s biggest economy, which has a history of election-related violence. In Kenya, confidence was rocked after Islamist militants attacked a university on April 2, killing 147 people. The raid weighed on the currency as it threatened the East African nation’s tourism industry, the second-largest foreign-exchange earner.
“The clear, peaceful, and seemingly fair conclusion of Nigeria’s presidential, legislative, and state elections has boosted investor sentiment,” John Ashbourne, an Africa economist at Capital Economics Ltd. in London, said in an e-mailed note on Thursday. In contrast, confidence toward Kenya soured with the decline in tourism and surging imports that’s pressuring the country’s current account deficit, he said.
The Kenyan shilling weakened 0.2 percent to 94.70 per dollar by 4:49 p.m., the lowest since November 2011 on a closing basis. It dropped 2.5 percent in April, the second straight 30-day loss.
Nigeria’s All-Share Index rose 1.9 percent to 34,708.11 in Lagos, the commercial capital, to erase this year’s losses. In Nairobi, Kenyan equities rose 0.4 percent to 229.81 for a 2015 advance of 6.2 percent.
The Nigerian naira strengthened 0.1 percent per dollar to 199, paring the loss this month to 0.1 percent. The naira has been trading around 200 per dollar after the central bank in February extended trading restrictions introduced since mid-September to control the currency’s value. It dropped 21 percent to a record low of 206.32 between the end of June and
Until the election results were announced at the end of last month, Nigerian equities were the world’s worst performers, with investors deterred by uncertainty over the vote and a 40 percent plunge since June in the price of crude oil, which accounts for about two-thirds of government revenue and 90 percent of export earnings.Feb. 12 as oil prices slumped.
Kenya’s NSE All-Share Index rose to a seven-year high in February before the start of the earnings season in the East African nation and has since dropped 2.1 percent, according to data compiled by Bloomberg. British-American Investments Co., the country’s biggest money manager, has been the bourse’s biggest laggard this month, falling 19 percent, while Kenya Airways Ltd. has slid 13 percent.
“There has been a price correction on many companies because they rallied ahead of the results,” Mercyline Gatebi, a research analyst at Nairobi-based Genghis Capital, said by phone.