African markets are expected to remain volatile and influenced mainly by events in global equity and commodity markets, according to Invest AD Markets Outlook
Middle East and Africa markets bulletin: January 2015.
“The Nigerian market in particular will likely continue to face selling pressure. Though the naira currency seems to have found a floor after depreciating by close to 11 percent against the dollar, investors remain on edge about the country’s near-term economic challenges and presidential elections in 2015. The authorities have taken a number of measures to address the economic strains caused by falling oil prices, from instructing banks to conduct stress tests examining their oil and gas exposure to increasing value-added and luxury goods taxes.
“Egypt, a net oil importer, has seen steady buying interest from African investors, but those from the wider Middle East and North Africa have been reducing exposure to the country, pressuring the market. While the country’s foreign reserves have declined, tourism and revenues from the Suez Canal are increasing, and Fitch recently upgraded Egypt’s ratings. The Moroccan and Tunisian markets have remained resilient in these turbulent times and the outlook for both is broadly positive. In Tunisia the conclusion of presidential elections may extend the market’s upward run. The decision of Morocco’s central bank to cut interest rates should improve companies’ growth prospects by stimulating economic activity and trimming their debt costs.”