East African markets roundup

As the festive season approaches, the East African markets are showing signs of stability and resilience in the face of global economic uncertainties. In a recent interview with CNBC Africa, Roy Daniels, Head of Africa Trading desk at Rand Merchant Bank, provided insights into the current state of the markets in Kenya, Uganda, and Tanzania. The key theme emerging from the interview is the mix of stability and caution that investors are navigating as they assess the opportunities in the region. Despite some currency fluctuations and concerns about upcoming elections, East Africa remains an attractive market for those seeking liquidity and potential returns. Let's delve into the key points discussed in the interview. Kenya, known for its tourist attractions and diverse economic activities, has seen its currency, the shilling, display a slight weakening trend. However, this has not deterred investors, as the country benefits from increased tourism revenue and a precautionary facility from the IMF. The upcoming elections in Kenya have raised some caution among investors, but the overall sentiment remains positive, with Daniels highlighting the potential for returns and liquidity in the market. In contrast, Uganda's currency, the shilling, has shown a worrisome upward trend, scaring off potential investors. Tanzania, on the other hand, has maintained stability, offering a consistent environment for investors. The diversity in currency movements across East Africa provides a unique opportunity for portfolio diversification, allowing investors to capitalize on both strengthening and weakening currencies. Daniels pointed out that the global markets are currently experiencing a period of calm as investors prepare for the festive season and look ahead to 2017. While there may be short-term uncertainty in emerging markets, including East Africa, Daniels sees potential for money inflow as investors seek opportunities in the region. Additionally, he emphasized Kenya's attractiveness for investors, citing its potential for the best returns and liquidity in the East African market. When discussing investment trends, Daniels addressed the cautious approach of international investors towards equity markets in Kenya. Many investors have been wary due to poor performance in the past year, leading them to explore alternative options like government papers and short-term bills. Daniels highlighted the importance of offering products that provide investors with opportunities for hedging and solid returns to regain their confidence in the market. Despite Kenya's position as a relatively advanced market in East Africa, the challenge lies in attracting international investors back to the equity market. Daniels stressed the need for innovative products that offer investors the ability to hedge against currency risks and secure their investments. Looking ahead to the new year, Daniels expressed optimism about market stability, emphasizing that external factors like the US presidency will have limited impact on East African markets. He reassured investors that opportunities for yield and returns will continue to drive investment decisions, with a focus on markets that offer liquidity and easy entry and exit options. Overall, Daniels highlighted the resilience of East African markets amidst global uncertainties, offering a potential avenue for investors seeking opportunities in the region.