Numerous endogenous and exogenous factors provided a handful of challenges for Frontier Markets in 2018. While some managed to perform well over the course of the year, there were those that faltered under the challenges that were presented to them. Here were the 5 worst performing Frontier Markets of the year (for comparative purposes, the MSCI Frontier Market Index fell by 19.42% in 2018).

1st – Kenya (-23.66%)

Kenya was the worst performing Frontier Market in 2018 as the bench market index (NSE 20 Share Index) sunk by just under 24%. As a result, investors’ wealth also declined by $4.1 billion along with the market.

A prominent theme in 2018 was the issuance of profit warning from numerous companies, as firms such as Sameer Africa, Deacons East Africa and Sanlam all warned investors that their profits will fall by a minimum of 25%.

The worst performers on the bourse included Eveready, Kenya Airways, Flame Tree and Kenya Orchards; while Crown Paints, KenGen and UAP failed to flatter investors as their share prices declined.

2nd – Nigeria (-17.81%)

Uncertainty in the political environment and Fed rate rises have been blamed for the Nigeria All Share Index ending 2018 in the red after recording a decline of 17.81%, a hugh contrast to the 42.3% rise it experienced in 2017. It has been reported the investors had lost approximately N1.9trn ($5.2bn) over the course of the year.

The worst performing stocks on the exchange were Union Dicon Salt (-98.1%), Lafarage Africa (-72.3%), AG Leventis Nigeria Plc (-61.4%), McNichols Plc (-60.1%) and Chams Plc (60%).

3rd – Oman (-15.21%)

Volatile oil prices, US Fed rate hikes and regional geopolitcal events have been the main contributors to the decline in the Muscat Securities Markets as the index recorded a 15.21% fall in 2018. It was the second worst performing market in the GCC after Dubai, whose index ended the year with a 25% loss.

This is also the second year in a row that Oman’s main index had ended in the red (-11.82% in 2017) and also the its worst performance since 2011, where it contracted by 15.69%. The only two positive endings came in 2013 (18.64%) and 2016 (6.96%).

4th – Lebanon (-14.96%)

Economic uncertainty and a rocky political landscape were the main factors behind the 15% fall in Lebanon’s Beirut Stock Exchange in 2018. Total trading volumes also fell by 36% compared to the same period recorded in 2017.

One of the major talking points of the year was the poor performance of real estate giant Solidere. The company recorded a $100m loss in the first half of 2018 as it was forced to tackle its situation with bad loans.

5th – Tanzania (-14.64%)

Completing the list of worst performers is Tanzania after the Dar es Salaam All Share Index fell by just under 15%. Not only did the market fall by a significant amount, but five Tanzanian banks were closed due to undercapitalisation.

Only three of the 28 listed companies on the exchange recorded increases in their share prices. These firms are Tanzania Portland Cement (41%), Dar es Salaam Stock Exchange Company (22%) and Tanzania Cigerette Company (1.1%). However, the laggards dragged the down the performance of he bourse after many, such as Tanzania Tea Packing Company and cross-listed Kenta Airways, devalued by over 50% in some cases.

Analysts say that factors such as tighter monetary policy and low profit announcements of listed companies are to blame for the poor performance in 2018. This caused investors to redeem their shares in large numbers, causing supply to outstrip an already lackluster demand for shares.

Also read: 2018’s Best Performing Frontier Markets