African Capital markets posted gloomy outlook in 2015

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The continent’s capital markets posted a dull outlook in 2015 with a report from   Price Water coopers-pwc indicating that this was on an account of uncertainties and volatilities within the market.

The 2015 Africa Capital Markets Watch publication indicated that weaker performance was recorded in the latter part while the first half of the year recorded high levels of transactions with both equity capital markets transactions and proceeds rising in the last five years.

Accordingly, the African Exchanges had $12.7billion in 2015 and a market capitalization of about US$1 trillion, with 23% of this value residing on exchanges outside of South Africa.

“In line with global trends, 2015 was a challenging year for African capital markets in the wake of market volatility and the emergence of renewed global economic uncertainty,” Nicholas Ganz, PwC Africa Capital Markets Leader said on Monday.

The publication noted there was growth in Initial Public Offer-IPO of 12 percent and 17 percent   in terms of transaction volume and US dollar denominated value when compared to the same period in 2014.

“However, 72% of  2015 IPO value and 54% of IPO volume was carried out during the first half of the year, reflective of the relatively higher levels of consumer confidence as compared to the second half of 2015,” the report  read.

Despite the performance, experts still say that the continent presents huge opportunities in the capital markets.
“Though statistics cannot be interpreted in isolation, certain metrics commonly used to analyze global market performance, such as the market capitalisation-to-GDP ratio, suggest that untapped value remains in Africa’s capital markets,” he said.

Pierre Celestin Rwabukumba, Chief executive Officer, Rwanda Stock exchange says that although the   year indicated uncertainties in the capital markets sector, the country’s capital markets continued to grow.


About the author

Olive Ndaka is the Junior Editor for RwandaEye. An investor and young entrepreneur, she is a quick learner and has contributed many articles for RwandaEye in Kinyarwanda.

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