The coronavirus pandemic dominated the headlines across the world as it proved to have a significant impact socially, politically and economically. Global markets slumped around February and March 2020 and while many made significant recoveries, including some Frontier Markets, others failed to do so. Here are the three worst performing Frontier Markets in 2020. For comparative purposes, the MSCI Frontier Markets Index posted a return of -2.41% in 2020.
1st – Kenya (-29.6%)
The Nairobi SE 20 Index’s decline of almost 30% last year means that Kenya tops the list as the worst performing Frontier Market in 2020. The decline was spurred by a combination of the coronavirus pandemic and a net sell-off from foreign investors, with net outflows reaching just under $281 million. Investors turned away from the equity market and moved some of their cash into high-yield Kenyan bonds, as well as the Absa NewGold ETF.
While the banking sector, which makes up the largest amount of the Index in terms of capitalization, dragged the performance down, companies such as WPP Scangroup (-65.12%), Nation Media Group (-57.30%), Bamburi Cement (-52.69%) and Centum Investment Company (-45.59%) recorded the largest declines.
Kenya was also the worst performing Frontier Market in 2018 when the NSE 20 Index contracted by almost 24%.
2nd – Mauritius (-24.3%)
The Stock Exchange of Mauritius declined by almost 25% in 2020 as it failed to recover from the sell-off in February.
The coronavirus pandemic significantly impacted the tourism industry and forced the island nation to to impose travel restrictions to prevent further spread of the disease, as well as other countries restricting the movement of their populations too. Mauritius was a success story in terms of containing and dealing with the virus, but travel numbers have yet to recover.
Some of the worst hit companies on the stock exchange were New Mauritius Hotels (-60.15%), Sun Limited (-53.78%) and SBM Holdings (-53.78%).
3rd – Jamaica (-22.8%)
The Jamaican Stock Exchange was the third worst performing Frontier Market last year as it recorded a fall of 22.8% and closed at 395,614 on December 31st. The worst day was when the market tanked to 337,506 on March 25th, almost 33% down from the start of the year.
The worst performers on the bourse were Sagicor Select Funds (-44.25%), Mayberry Jamaican Equities (-37.50%), Sygnus Credit Investments (-36.65%) and Panjam Investment (-34.63%).
Other decliners: Panama (-21.6%), Bulgaria (-21.2%), Lebanon (-16.3%), Ghana (-14.4%), Croatia (-13.8%), Tanzania (-13.5%), Malta (-12.4%)