Global bond traders, What do investors expect who ventured into Africa during 2019, were able to reap massive gains, and the dollar-denominated sovereign debt of the continent achieved a total return of 20% since the beginning of the year, more than any other region in the emerging markets.
“Bloomberg News” explained that the local bonds also provided a strong performance, as both bonds denominated in the Egyptian pound and Nigerian “Naira” managed to achieve a return of more than 30% in dollars.
What do investors expect
If the world’s major central banks remain in a cautious position next year, this would maintain high returns in emerging markets and increase demand for African bonds.
Bank of America strategists, including David Hanner from London, said Africa was a land of opportunity, and could be one of the main beneficiaries if the United States and China made further progress in trade talks.
In this regard, “Bloomberg” highlighted the top 10 major markets in 2020, as follows:
Egypt is still a favorite destination for investors in securities portfolios, as traders defended it, attracted by the yields on bonds denominated in the Egyptian pound of approximately 14% and the value of its local currency increased by 12% this year, which is its best performance in at least 25 years.
The French bank, Societe Generale, expects the currency gains to increase by an additional 4.5% to 15.35 against the dollar next year.
However, the agency said, the reforms have not attracted the foreign direct investment and jobs that Egypt desperately needs, and investors plan to monitor the Egyptian market to see if the country will witness any anti-government protests, such as those that occurred last September, which affected domestic markets for a short time .
The second largest oil producer in Africa is still suffering from the collapse of crude oil prices five years ago, and the International Monetary Fund said this week that Angola’s economy will suffer a contraction for the fourth consecutive year in 2019.
However, investors were affected by the country’s central bank reforms, including the devaluation of the Angolan “kwanza”, and the devaluation of the currency by 32% against the dollar this year, increased inflationary pressures, but it also eased the foreign exchange shortage crisis that was hindering business. Commercial.
The country in the Horn of Africa is still one of the fastest growing economies in the world, but that obscures the country’s deep problems, as inflation rates there have accelerated to more than 20%, and the country lacks foreign currency sharply.
Prime Minister Abi Ahmed Ali, who won the Nobel Peace Prize this year, resorted to the International Monetary Fund to obtain a loan of $ 2.9 billion for 3 years, a move that was widely welcomed by investors, especially as it would accelerate openness plans and modernize the state-controlled economy .This came because investors were concerned about the financial crisis
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