VARIOUS: Stock markets across Africa, from Cairo to Johannesburg, have surged to all-time highs

Record ID: 238289

  • Title: VARIOUS: Stock markets across Africa, from Cairo to Johannesburg, have surged to all-time highs
  • Date: 12th October 2007
  • Summary: (AD1) JOHANNESBURG, SOUTH AFRICA (OCTOBER 11, 2007) (REUTERS) EXTERIOR OF THE JOHANNESBURG STOCK EXCHANGE (JSE) INTERIOR OF THE JOHANNESBURG STOCK EXCHANGE WITH FINANCIAL INDICATORS BOARD FINANCIAL INDICATORS
  • Embargoed: 27th October 2007 13:00
  • Keywords:
  • Topics: Finance
  • Reuters ID: LVA47QSF6KFRLPF6EECK3CR41XFB
  • Story Text: Stock markets across Africa, from Cairo to Johannesburg, have surged to all-time highs this week as the the world's exchanges recover from shocks caused by the sub-prime crisis in the United States and investors took a fresh look at risk in emerging markets, including Africa.
    Stock markets across Africa are trading higher this week, with South Africa and Egypt at all time highs and even the West Africa regional bourse, situated in a country still technically at war, has more than doubled in value this year.
    Positive sentiment among foreign investors pushed Egypt's main stock indexes up, with the indexes edging up to new all-time closing highs for the fourth consecutive session on Thursday (October 11).
    The highs came came ahead of the Muslim Eid el-Fitr holiday.
    Thursday's rise was led by small caps, but some of the markets heavyweights have done well this week too. Among those leading the market up was real estate company Heliopolis Housing. The company posted a 56 percent rise in net profit last week, hitting its highest full-year profit on record.
    Angus Blair, head of research at Beltone International in Cairo said on Thursday that foreign direct investment, particularly into the retail sector, has ignited the stock market.
    Blair also said that the sub-prime crisis in the United States had brought about a change in the way investors viewed markets like Egypt's.
    "There are so many positive dynamics that outweigh the negatives that you have in the country so far, that the sub-prime crisis had made people rethink on Egypt I think in a more positive way because we've seen and highlighted and shed light upon some of the issues upon Egypt is really about and can this growth continue," Blair said.
    At the other end of the continent, stocks listed on the Johannesburg Stock Exchange, or JSE, by far Africa's market giant, rose to all-time highs this week, driven by resource shares tracking global stocks and cheered by a rally on Wall Street after talk the U.S. Federal Reserve might cut borrowing costs.
    Global diversified miners like BHP Billiton and Anglo American have led the charge in recent days, but banks and other financial stocks have also risen.
    While some have said the South African market looks as though it may be topping out, senior economist at Econometrics in Johannesburg, George Glynos, says he believes the bull run still has legs.
    "We still believe that the South African economy has got a lot of life left in it despite the NCA, and despite the interest rate hikes that we've seen through the course of the past two years," he said.
    West Africa's regional bourse may be a minnow in comparison to the JSE, but it has seen increasing interest from outside the region.
    The stock market, based in Abidjan, lost around 80 percent of its value when civil war broke out in Ivory Coast in 1999. With a locally-brokered peace deal holding up, the main indexes have clawed back half of that drop and are around 100 percent for the year, with the main indice rising from around 100 to highs of 210 this week, according to stock broker Maurice Yapo.
    "Everything is on a high, all the stock prices have risen. So this tells you that there is confidence in the regional stock exchange. Even if we have an ongoing crisis here in Ivory Coast, it's the only place where there is still room to invest. It's the only sector where there is still confidence in the market, and the prices have doubled. The indices, for example, have doubled, as you have seen, we have gone from 100 to almost 210 now," Yapo said.
    Advances in the regional bourse have come on the back of stronger regional economies, higher commodity prices and increased interest from outside of the region, including South African investors.
    The laggard of late has been Kenya, a star performer last year. The Nairobi Stock Exchange, or NSE has seen stock prices tumble ahead of a hotly-contested election likely to take place in December this year. The NSE main 20-share index dropped to 4,979.98 points on Monday (October 8) this week, its lowest since March 29, and off an all-time high of 6,161.46 on Jan.
    Analysts say many investors have been cashing in shares in the hope of picking them up later at a lower price.
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