March 2017’s Best & Worst Performing Frontier Markets
On a monthly basis, Frontier Market News will look at the best and worst performing Frontier Markets. Here’s the list for March 2017.
Best Performing Frontier Markets
1st – Ukraine (11.07%)
- Raiffeisen Bank (49.91%)
- Ukrnafta (1.92%)
- Motor SICH (1.18%)
Ukraine was March’s best performing Frontier Market after its stock market recorded an 11% increase over the course of the month, which also led to the bourse ranking in the Top 5 for the third month running.
Not only did Raiffeisen Bank see its profits double due to lower risks and operating costs, but the bank also earned the title of “Best Bank in Central and Eastern Europe” according to financial magazine Global Finance. Ukraine also ratified a trade agreement with Canada this month, as well as a double taxation treaty with Luxembourg.
2nd – Egypt (8.86%)
- EZZ Steel (26.64%)
- Arabian Cement (19.45%)
- EFG Hermes (17.11%)
Egypt was crowned the worst performing Frontier Market in February, but has renounced that title to rank 2nd in March.
Top performer EZZ Steel increased its domestic rebar (reinforced steel) prices by $11 per tonne ($529 to $540) on Thursday 16th March 2017; while Egyptian investment firm EFG Hermes also had a busy month after acquiring a 51% stake in a Pakistani company, reporting a 690% increase in net profits in 2016 and seeing its brokerage arm complete 26% of total trades on the Egyptian stock exchange.
3rd – Argentina (5.92%)
- Transportadora de Gas (18.48%)
- Pampa Energia (18.25%)
- Petrobras Argentina (18.18%)
Companies in the gas and energy sectors helped propel Argentina to 3rd place in March. One of the major talking points was Pampa Energia’s strong financial results for the end of 2016, including significant increases in sales revenues and EBITDA, alongside a fall in losses for the financial year (compared to 2015).
Given Argentina’s upcoming review by Morgan Stanley Capital International to upgrade the nation from “Frontier Market” to “Emerging Market” a consultation has been launched in order to display what the MSCI Frontier Market Index will look like without Pakistan, Argentina and Nigeria.
4th – Latvia (4.03%)
- Rigas AutoelektroAparatu (23.33%)
- Daugavpils Lokomotivju (20.69%)
- Siguldas CMAS (15%)
The Riga bourse slid into the Top 5 performers for March after strong performances from equities listed on the exchange, as well as positive trade news for January.
Rigas AutoelektroAparatu (Electric Machine Building Works) is planning on improving energy efficiency. Despite posting a 3.1% fall in net turnover, Siguldas saw its share price increase by 15% in March after profit before taxes increased by 8,000 euros in 2016 (compared to 2015) and commercial profitability stood at 9.6%, a 1% improvement on the previous year.
5th – Kenya (3.94%)
- KCB Group (37.62%)
- Sasini Ltd. (30%)
- Equity Group Holdings (25.71%)
Kenya once again features in the Top 5 this month after an eventful month that saw the launch of Barclay’s NewGold ETF, the first exchange traded fund in East Africa.
Constituents of the Nairobi Stock Exchange also enjoyed a bumper in March. Kenya’s KCB Group posted a 10% rise in pre-tax profits in 2016, a figure that stands at $283.89 million. Tea producer Sasini’s share price increased by 30% despite profit warnings and Equity Group Holdings agreed to receive a loan from The European Investment Bank for 95 million Euros to help boost lending for small and medium sized enterprises.
Worst Performing Frontier Markets
1st – Croatia (-10.43%)
- Ledo (-46.76%)
- Belje Darda (-22.68%)
- Varteks (-18.58%)
Croatia’s stock market has been ranked as the worst performing Frontier Market in March after regressing by 10.43%.
Ice cream and frozen food producer Ledo lead the pack of large decliners after parent company Agrkor accumulated large debts to Russian banks, ultimately leading to the company agreeing an emergency deal to ensure its solvency. Varteks has also been removed from Croatia’s blue-chip CROBEX index, resulting in an 18.58% fall in its share price.
2nd – Morocco (-4.58%)
- Fenie Brossette (-17.81%)
- Compagnie Miniere De Touissi (-17.65%)
- SNEP (-17.11%)
The Casablanca Stock Exchange recorded a second consecutive monthly decline in the same month that King Mohammed VI ousted Prime Minister Abdelilah Benkirane. Fenie Brossette, the largest decliner in the bourse, announced mixed company results for 2016 with a 6% decline in sales, but a 3.6% gross operating margin (compared to 1.7% in the previous year).
3rd – Oman (-3.97%)
- Muscat Bank (-15.6%)
- Oman & Emirates Investments (-14.97%)
- Renaissance Services (-11.2%)
Oman’s stock market declined by -3.97% in March, primarily driven by a fall in the share prices of companies in the financial sector.
Muscat Bank went ex-dividend on the 20th March which consequently contributed to 5.71% of its total decline over the month. The board announced a payout of a 30% dividend for 2016 at its annual general meeting (AGM). The bank enjoyed an increase of 0.6% in net profits in 2016 compared to the previous year, but the news was not enough to offset a fall in share price over the course of the month.
4th – Jamaica (-2.56%)
- Lime (-24.24%)
- Caribbean Cement Company (-16.22%)
- Mayberry Investments (-13.89%)
Jamaica has regularly featured as one of the better performing Frontier Markets, but the country’s performance in March has been relatively lackluster compared to its peers.
Caribbean Cement Company watched its parent company Trinidad Cement Limited apply to be delisted from the Jamaican Stock Exchange. The company also endured a relatively disappointing year in 2016 after it reported a 16% fall in profits since 2015.
5th – United Arab Emirates (-2.38%)
- RAK Properties (-18.18%)
- Gulf Medical Projects (-17.87%)
- Umm Al Qaiwain General Investments (-17.39%)
Despite claiming the title of “Happiest Frontier Market”, the United Arab Emirates unfortunately completes the list of worst performing Frontier Markets in March 2017. The market has moved roughly in line with oil prices over March and declines in share prices occurred across all sectors in the market
Year-to-date (31st March 2017)
Ukraine (30.94%); Kuwait (22.29%); Argentina (19.7%); Jamaica (17.05%); Kazakhstan (14.44%)
Nigeria (-5.05%); Slovakia (-4.29%); Oman (-4.01%); Saudi Arabia (-2.90%); Sri Lanka (-2.67%)
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