AFRICA: The BEST and WORST performing indexes of 2022 – Zambia (BEST) Kenya (WORST)

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The atmosphere is not particularly carefree or relaxed on stock markets, in the traditionally quiet week between Christmas and New Year’s Eve. Investors did not get their end of year rally, perhaps because indices had already rebounded quite a bit since mid-October. The reason for this post-Christmas depression has not changed: the central banks’ hawkish policy is frightening investors, who fear an uncontrolled slowdown of the major economies. If inflation was the central theme of 2022, economic momentum promises to be the common thread in 2023.

Investors are therefore moving away from risky assets while waiting for the usual macro data.

Since the news between Christmas and New Year’s Day is not very dense, it’s a good time to look back at 2022 and how market indexes performed in Africa.

Very few places have recorded a positive performance in 2022, so it is important to highlight the best and the worst.

BEST: Congratulations to Zambia whose national index has done very well in 2022.

A rally in Copperbelt Energy Corp. help Zambia’s benchmark stock index become Africa’s best performer this year. 

The 22-member Lusaka Securities Exchange All Share Index climbed 12% in dollar terms in 2022 and had a second straight year of gains. Copperbelt, which supplies power to mining companies in Africa’s second-biggest copper producer, contributed most to the index’s advance.

Local investors piled into the power supplier’s stock after the government of President Hakainde Hichilema, who was elected in August 2021, helped resolve a dispute the company had with the previous administration. The gains in the company’s shares may continue in 2023, according to Charles Mate, founder of Stockbrokers Zambia Ltd.

“What we have seen really is a resurgence in terms of investor interest, especially from the domestic market,” Mate said. “This stock still has significant upside.”

WORST: Kenya’s currency fell the most in seven years and its benchmark stock index became Africa’s worst performer in 2022 after Russia’s war in Ukraine raised import costs and fueled inflation. 

Kenya’s key stock index dropped almost 24% drop, the biggest decline since 2011 and making it the region’s worst performer in local-currency terms. 

Safaricom Plc, which accounts for more than half of the market capitalization of the 63-member Nairobi Securities Exchange Ltd. All Share Index, plunged 36%. 

East Africa’s biggest company by value “suffered from a global downturn in investor sentiment, driven by concerns over rising interest rates and amplified by deteriorating macroeconomic conditions,” according to Nairobi-based NCBA Investment Bank Ltd. 

Credit: Mark-Anthony Johnson