• The Nigerian Stock Exchange's growth was dragged due to the contested elections

  • The Ghanaian bond market has declined as the nation takes steps to recuperate its domestic debt

  • African Markets offer an alternative for investment as SVB ceases operations

Nigeria (Nigeria Stock Exchange)

Harare-The market has been relatively flat (0.33% gain) during the past week; however, the Energy Sector has seen a significant drop of 5.4%. in the 4-week period there has been gain of 2.62%, and an overall year-to-date gain of 8.85%.

The flat growth over the week and the 5.4% fall out of energy sector can be attributed to the recent political developments in the country, such as the nation’s reportedly disputed elections held on Feb 25th.

Also, the past month has seen a sharp decline in oil prices, as reported by Reuters, resulting in the African Stock Exchange giant tumbling from its position as the top market back in January 2023 to ranking number 8 by 14 March 2023, according to afx.kwaisi.

The recent dark night for Silicon Valley Bank (SVB), however, could potentially reverse the perilous situation of the capital market player, as it is reported that over 10,000 players are involved, with more than 40% of those coming from Africa

This gives NGX a helping hand in restoring its liquidity, all other things being equal, since the stock market is still the largest in Africa and could provide a lifeline to those Africans who were left in a difficult situation by the collapse of the biggest bank on Friday March 10th.

Malawi (Malawi Stock Exchange)

Over the last 7 days, the market has seen impressive gains of 4.2%, with the Communication Services sector leading the way with a remarkable 8.1% increase in value. The financial sector followed suit, with a 1.4% increase largely driven by the incredible 104% YTD growth of NBS Bank market cap and 11.1% growth WTD market cap.

NBS Bank plc provides retail and corporate banking services to individuals, small and medium businesses, large corporations, as well as public institutions in Malawi. This rapid surge in the bank's market cap comes after the publication of a cautionary statement regarding its expectation around the FY2022 results.

The company revealed that it expects a 140% increase in profit after tax for the year ending 31 December 2022, compared to the same period in 2021. This revised figure was signed by Company Secretary Marsha Ovi Machika, citing recoveries through courts, as well as a review of credit impairments on significant credit exposures. In 2021, the Bank recorded a notable 9% jump in profit after tax to K7.69 billion, up from K7.05 billion the year before, attributed to ‘institutional growth’. The first half of 2022 saw a 16% increase to K5.1 billion from the previous year’s K4.4 billion. NBS Bank is now looking to the future, with a new five-year strategy (2022-2026) aimed at expanding its market share and improving efficiency.

Ghana (Ghana Stock Exchange)

The market has seen a remarkable 5.4% increase over the last 7 days, with the Communication Services sector leading the way with an impressive 11% gain. In stark contrast, the market has declined by 9.2% over the past 12 months. .

Over the past month, however, the bond market experienced a significant year-on-year decline of 52.50%, according to the Ghana Stock Exchange's Summary of February 2023 Market Activities.

Of the noted effect, Banks in Ghana are facing losses due to President Nana Akufo-Addo's government restructuring 83 billion cedis (around $6.8 billion) of domestic debt as part of a $3 billion bailout from the International Monetary Fund.

Standard Bank and FirstRand Ltd. have both accounted for impairments. Ghana's public debt currently stands at about 576 billion cedis. 

Standard Bank reported that it had set aside 1.5 billion rand (around $81 million) to offset potential losses from the West African nation's loan-restructuring program. The bank said its total holdings of domestic and offshore dollar-denominated bonds is around 2.6 billion rand.

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