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Harare – Most African equities markets are likely to close the year 2015 in the red in US dollar terms, judging by the losses recorded in the year to date.
More than 10 established exchanges, including the JSE, were in a loss position as at November 27 2015.
The biggest loser year-to-date was Zambia’s Lusaka Stock Exchange (LuSE), which was down 42.64% in US dollar terms.
Analysts said foreign investors were hardest hit in Zambia, as the LuSE lost only 6.88% in kwacha terms.
Foreign investors were also heavily exposed in Nigeria, where the Nigerian Stock Exchange All-share index fell 26.84% in US$ terms. Local investors also lost heavily with the market down 20.31% year-to-date in the local naira currency.
Market operators in Nigeria have attributed the market's poor performance to weak demand caused by negative investor sentiments over lacklustre corporate results.
The JSE All-share index was also in the red at 15.69% down, as was Kenya’s FTSE Nairobi Stock Exchange, which gave up 23.85%.
Market players have attributed the persistent downward trend to the exit of some foreign investors amid foreign exchange pressures.
Economic analyst Jerome Negonde said foreign investors - who are the biggest participants on most African markets - were seeking exit points due to forex developments.
READ: Foreigners now control almost half the JSE’s Top 40
The anticipated change in US interest rate policy is expected to exert more pressure on African markets.
These markets have been one of the preferred destinations for funds in recent years shunning lower interest rates in the US, but all that has changed since the US Federal Reserve hinted at putting up interest rates.
The Zimbabwe Stock Exchange (ZSE), which trades in US$, also came off by as much as 27.74% as the country’s economy continues to wane.
Analysts said although the ZSE is not facing any currency headwinds, many factors are working against the equities market. The trading period was characterised by weakening results, with companies reporting falling revenues and profitability.
