On a monthly basis, Frontier Market News will look at the best and worst performing Frontier Markets. Here’s the list for September 2017.
Best Performing Frontier Markets
1st – Mongolia (17.82%)
Mongolia was the best performing Frontier Market over the course of the month after recording an impressive 17.82% leap since the end of August.
Not only has the $5 billion bailout from the IMF helped the country, but the recent boom in coal exports has filtered through into the stock market and has been the primary factor behind the Mongolian Stock Exchange growing by 47.66% since the start of the year. Coal exports have quadrupled since last year and miners are expected to increase production in order to take advantage of the buoyant market conditions.
2nd – Argentina (10.65%)
Argentina’s MERVAL frequently features in the best performing markets almost every month and September is no different after it grew by 10.65%. It was also the first Frontier Market to reach the 50% growth mark this year.
There was positive economic data emanating from the South American nation over the course of the month, such as a 5.1% year-on-year rise in industrial activity as well as a 2.7% growth in its gross domestic product (GDP) since last year.
Argentina is currently the best performing Frontier Market this year (53.33%), ahead of the likes of Kazakhstan (50.92%) and Ukraine (48.94%).
3rd – Ukraine (5.78%)
The Ukrainian Exchange grew by 5.78% in September as it continues its impressive run since January.
Ukraine had a busy month, especially after buying back almost $1.5bn dollars worth of bonds due in 2019 and 2020 in order to reduce its short-term debt burden. There is also talks regarding a potential initial public offering (IPO) of national oil and gas company Naftogaz.
Worst Performing Frontier Markets
1st – Kenya (-7.19%)
The 7.19% decline in the Nairobi Stock Exchange led to Kenya being crowned as the worst performing Frontier Market during the month.
Investors were quick to pull their money from the East African country’s market due to the political uncertainty that arose from the Supreme Court’s decision to annul the results of the election. There were immediate redemptions in shares of Safaricom and East Africa Breweries Limited, but the biggest decliner in September was ARM Cement who lost just over 28% of its value.
2nd – Qatar (-6.01%)
Not only is Qatar the worst performing Middle Eastern market this year, but it is also holds the same title for Frontier Markets. The 6% loss last month contributed to its losing streak as the QSE has lost 17.42% of its value this year.
Regional tensions with its neighbours, primarily spearheaded by Saudi Arabia, saw the market drop to a 19-month low in September. Doha-based Qatar Insurance Company was the biggest casualty after the diplomatic crisis forced it to close its UAE branch and ultimately lost 23% of its share price.
3rd – Romania (-5.17%)
Romania’s Bucharest BET Index fell by just over 5% as the poor performance of banking stock weighed in on the exchange.
BRD Groupe Societe Generale (-10.5%) and Banca Transilvania (-9.2%) were the worst performing stock during the month, despite Moody’s claiming that the banking sector has made considerable progress in getting rid of troubled loans from their balance sheets and should benefit from Romania’s economic recovery in the next 12 to 18 months.
Year-to-date (30th September 2017)
Argentina (53.33%); Kazakhstan (50.92%); Ukraine (48.94%); Mongolia (47.66%); Ghana (37.71%)
Qatar (-17.42%); Oman (-11.16%); Croatia (-9.21%); Pakistan (-7.45%); Lebanon (-5.10%)