Malawi is best performing African stock market in 2013

Malawi’s stock exchange is the best performing in Africa so far this year, with a 71% US dollar-adjusted return, according to Investinginafrica.net.  It is a tiny exchange, with weekly trade of just $400,000, which means small buying pressure can distort the overall market performance.

The second best performer so far this year is the Ghana stock exchange, up by 49%, followed by Nairobi with 48,6%. The JSE, in contrast, is down nearly 10% in US dollar terms, while the Zimbabwe stock exchange gained nearly 40% over the course of the year so far.

Taking a five year view, the Namibian stock exchange gained 107% in US dollar terms, a shade above the JSE’s 102%, and the S&P 500′s 103%.

These figures suggest there are outstanding investment opportunities in Africa, which is considered by many overseas fund managers as the “next big thing” in the global investment game.

One factor to bear in mind when looking at these figures is they reflect, to a greater or lesser degree, profligate monetary expansion by the respective central banks. The South African Reserve Bank, for example, has expanded M3 money supply by 15% a year for the last five years. This is highly inflationary, though it has yet to show up in the consumer price index figures, which show consumer inflation of just under 6% for the last five years. If this money expansion is not showing up in consumer inflation, it means the newly created money has found its way into high yielding assets, such as on the stock market or property market.

African Stock Market Performance

US Dollar-Adjusted Returns

As of November 30, 2013

Market Index 1-Month Return 6-Month Return 1-Year Return 3-Year Return 5-Year Return Year to Date Return Avg Weekly Trade Volume
Botswana Stock Exchange 0.1% 2.6% 8.6% -1.2% 5.1% 6.8% $6.7m
Bourse Régionale des Valeurs Mobilières 4.9% 4.2% 40.1% 44.1% 31.0% 34.8% $4.5m
Dar es Salaam Stock Exchange 5.0% 26.9% 30.8% 57.3% 27.0% 28.5% $8.5m
Ghana Stock Exchange -1.6% -0.3% 57.9% N/A N/A 49.3% $4.5m
Johannesburg Stock Exchange -2.2% 8.9% -0.5% -2.2% 102.0% -9.7% $3,709m
Lusaka Stock Exchange 1.6% 11.5% 34.0% 39.5% 45.1% 29.0% $0.6m
Malawi Stock Exchange -0.8% 55.2% 69.9% N/A N/A 71.0% $0.4m
Nairobi Securities Exchange 5.0% 9.8% 52.0% 40.8% 87.3% 48.6% $36.9m
Namibian Stock Exchange -0.6% 10.2% 6.0% 36.4% 107.2% 0.0% $0.9m
Nigerian Stock Exchange 3.9% 2.8% 46.2% 50.6% -12.5% 37.9% $122.3m
Stock Exchange of Mauritius 1.7% 8.5% 25.7% 12.1% 91.3% 19.3% $5.8m
Uganda Securities Exchange 0.1% -1.2% 44.3% 23.6% 62.7% 42.9% $0.6m
Zimbabwe Stock Exchange 1.6% 0.3% 41.9% 37.8% N/A 39.8% $8.3m
S&P 500 2.8% 10.7% 27.5% 52.0% 103.4% 26.6% N/A