June 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 June 2017.
Best Performing Frontier Markets
1st – Latvia (13.95%)
- Lokomotiv Daugavpils (69.57%)
- Kurzemes CMAS (52.67%)
- Latvijas Kugnieciba (52.55%)
Latvia’s Riga Stock Exchange was the best performer in June and increased by 13.95% over the course of the month, primarily bouyed by the good performance of a handful of stocks. The solid performance over the month has also led to Latvia becoming the best performing Frontier Market in the first half of 2017.
Shipping company Latvijas Kugnieciba’s share price rose by just over 50% after Netherlands-based Vitol Holding had acquired a 19.62% share of the company on the 15th June 2017 (39,249,118 shares in total), pushing its existing shareholding in the company to 69.56%.
2nd – Nigeria (12.27%)
- May & Baker Nigeria Plc (160.40%)
- Cement Co. Northern Nigeria (77.66%)
- Ashaka Cement Plc (55.27%)
Nigeria’s stock exchange continued its impressive run in June especially after Morgan Stanley Capital International (MSCI) decided to delay its decision on downgrading the African nation from “Frontier Market” to “Standalone Market” status, giving the country more time to improve its financial sector and attract foreign direct investment.
May & Baker’s solid performance has led to the company being named as one of the best performing stocks on the bourse. The firm has recently agreed a joint venture with the Federal Government to produce vaccines between 2017 and 2021.
3rd – Slovakia (8.12%)
- OTP Banka Slovensko (100.00%)
- Slovnaft (11.11%)
- Vsebecna Uverova Banka (3.03%)
A common theme among some of the most illiquid Frontier Markets is the ability for one stock’s increase in share price to have a huge effect on the overall bourse. This happened in Slovakia when OTP Bank Slovansko doubled its share price (from 1 euro to 2 euros) by only transferring over 64 units.
4th – Saudi Arabia (8.07%)
- National Commercial Bank (27.64%)
- Savola (22.55%)
- Saudi British Bank (19.79%)
The Tadawul also enjoyed a good month, recording an increase of 8.07%. MSCI’s recent decision to put Saudi Arabia on the “review list” to be included in its Emerging Market indicies proved to be a major driving force behind the exchange’s good performance in June.
Alongside other countries in the Middle East, Saudi Arabia is currently in the middle of a diplomatic dispute with Qatar and has threatened to cut all ties with the nation unless a set of demands have been met, including closing Doha-based broadcaster al-Jazeera.
5th – Bulgaria (6.39%)
- Eurohold Bulgaria (37.53%)
- Sopharma Sofia (12.68%)
- Monbat (7.73%)
Bulgaria completes the list of best performing Frontier Markets in June after its stock market increased by 6.39% over the month. The country experience an impressive year-on-year GDP growth rate of 3.5% in the first quarter of the year (compared to 3.4% predicted by analysts) and a 0.9% quarterly growth rate.
Worst Performing Frontier Markets
1st – Romania (-10.42%)
- Conpet Ploiesti (-32.96%)
- Transgaz Medias (-20.27%)
- Transelectrica (-17.62%)
Romania’s stock market shed over 10% of its value last month, earning it the title of “Worst Performing Frontier Market” for June.
Conpet Ploiesti, the worst performing stock on the market, saw its share price drop by just under 33% after going ex-dividend. Transgaz Medias is in the process of headhunting a new General Manager for its Gas division; while the value of Transelectrica’s shares did not react too kindly to a recent report stating that electricity prices in Romania will increase by 8% from the 1st of July.
2nd – Qatar (-9.91%)
- Dlala Holdings (-24.51%)
- Islamic Holding Group (-21.10%)
- Aamal Co. (-14.64%)
Qatar’s stock exchange took a hit during a month where a coalition of countries led by Saudi Arabia had cut diplomatic ties with the nation. The declines were felt across all industries, but the financial sector was a major contributor the performance from the bourse.
3rd – Pakistan (-7.16%)
- Bank of Punjab [rights] (-97.06%)
- Dewan Farooque Spinning Mill (-38.57%)
- JA Textile Mills Ltd (-38.33%)
After MSCI officially classified Pakistan as an “Emerging Market”, the performance of the stock market has lost its momentum and been on a slide.
June’s decline was mainly due to the share prices of numerous stocks in the textile industry falling after it was reported that exports in the sector shrank by $3 billion over a 3 year period.
4th – Oman (-5.24%)
- Al Batinah Power (-18.60%)
- Phoenix Power Co. (-15.11%)
- Al Anwar Holdings (-12.02%)
The second worst performing MENA-based country was Oman, who saw its Muscat Stock Exchange fall by just over 5%.
News of a 5.7% increase in power production was not enough to ignite a surge in share prices for companies in that industry, in fact leading to the opposite with the likes of Al Batinah Power and Phoenix Power Company, the bourse’s worst performers, faling by 18.6% and 15.1% respectively in June.
5th – Argentina (-3.01%)
- Celulosa Argentina (-21.75%)
- Agrometal (-11.89%)
- Siderar (-9.48%)
Finally, Argentina’s MERVAL Index’s poor performance in June earned it a spot in the worst five performers for the month. Missing out on becoming an Emerging Market contributed to the bourse’s decline towards the end of the month.
Argentina will have to wait until June 2018 in order to find out whether or not MSCI will officially upgrade it to the coveted Emerging Market status.
Year-to-date (30th June 2017)
Latvia (32.22%); Ukraine (31.66%); Argentina (28.12%); Nigeria (23.23%); Kazakhstan (22.24%)
Oman (-11.49%); Qatar (-10.04%); Croatia (-6.48%); Namibia (-5.15%); Lebanon (-5.07%)
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