Zim, Nigeria lead Africa in fund outflows

Despite Global Emerging Market (GEM) fund inflows standing at $2,9 billion between October 29 and November 2, Zimbabwe witnessed an outflow of $0,54 million slightly better than Nigeria with an outflow of $0,54 million during the period.

Kenya witnessed $0,32 million outflow, while Botswana saw $0,29 million leave the country. Mauritius also saw $0,19 million leave its economy, Malawi witnessed the exit of $0,1 million and Tunisia $0,08 million.

South Africa continued to delight investors on the continent with fund inflow of $199,3 million, while Egypt came a distant second with inflows of $6,62 million.

Other African countries that recorded inflows included Swaziland ($0,67 million), Tanzania ($0,53m), Zambia ($0,47m), Ghana ($0,1m) and Namibia ($0,06m).

ReNaissance Capital said there are signs of country rotation among EMS. For example, Brazil’s funds showed outflows, while Russian funds showed strong inflows, with Brazil trading on a 2012 Price Earnings Ratio of eight times (consensus estimates), compared with Russia’s at 4,8 times and the GEM average of nine times. It is expected that shift from Brazil to Russia could accelerate in the coming week as investors dig further into valuations.

GEM funds showed inflows of $2,9 billion last week (excluding exchange traded funds (ETF), which stood at $827 million. All-country world funds showed an inflow of $77 million (excluding ETFs put at $220 million). Developed Market funds had an inflow of $56 million.

The total inflow into EM funds, summed over all geographies and countries, was $3,4 billion. This was the second consecutive week when EM funds had net large positive flows, which showed that risk appetite is growing.

Among regional funds, there were inflows into regional emerging Asia funds ($135 million) and Latin America ($33 million), but there were outflows from Africa ($10 million), Europe, Middle East and Africa saw an outflow of $4,9 million and Emerging Europe funds an outflow of
$2 million.

—Business Reporter /Nigerianews24.com

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